Remarks to the House of Commons Standing Committee on Finance on Bill C-97, Budget Implementation Act, 2019, No. 1
Mr. Chair, committee members, thank you for the invitation to take part in your consultations on Bill C-97.
The Business Council of Canada represents the chief executives and entrepreneurs of 150 leading Canadian companies, in all sectors and regions of the country. Our member companies employ 1.7 million Canadians, account for more than half the value of the Toronto Stock Exchange, contribute the largest share of federal corporate taxes, and are responsible for most of Canada’s exports, corporate philanthropy, and private-sector investments in research and development.
In the Council’s pre-budget submission we asked the government to introduce a comprehensive strategy to improve competitiveness, diversify trade and attract private sector investment. Among other recommendations, we called on the government to undertake a comprehensive review of Canada’s tax system with the goal of strengthening the incentives for investment and growth.
We welcomed the decision by the Government of Canada to allow temporary full expensing for investments in machinery and equipment, as well as accelerated expensing for all other types of capital investment.
The new measures will partially offset the negative impact on Canada’s economy of recent U.S. tax changes, while creating incentives for Canadian companies to make new job-creating investments. According to a recent survey of our members, 25 per cent of respondents believe that the Accelerated Investment Incentive will lead to an increase in capital spending.
We also welcomed the introduction of the Canada Training Credit in Budget 2019. It’s no secret that competitive international pressures and new technologies are requiring workers to become more skilled more quickly. Recognizing these challenges, the Business Council of Canada launched the Business/Higher Education Roundtable (BHER) in 2015 to connect business and post-secondary leaders and help Canadians transition between school and work.
One of BHER’s key initiatives is to help 100% of Canadian post-secondary education students get a work-integrated learning experience such as a co-op, internship or applied research project. The commitments made in Budget 2019 – including support for work-integrated learning and BHER – are a big step in making Canada the most skilled county in the world.
Similarly, the Business Council looks forward to working with the government and consulting with our members regarding the design of the Canada Training Benefit so that it can achieve its goal of helping Canadians upgrade their skills and remain active parts of our growing economy.
Despite these positive announcements, we believe that Canada’s competitiveness challenges go much deeper than any single measure. We will continue to urge the government to adopt a comprehensive strategy to foster business confidence, attract investment and enable the creation of new, high-value jobs. This includes undertaking a broader tax reform and simplification effort to restore our long-held tax advantage over the US.
Less than 10 per cent of CEOs recently surveyed by the Business Council express confidence in the competitiveness of Canada’s business climate. According to the survey, the tax and regulatory burden combined with concerns about the availability of talent are the most important factors affecting company investment plans in Canada.
The federal budget confirmed that Canada’s economy has slipped into low gear, underscoring the need for action to boost private-sector confidence and ensure a future of good jobs and a high quality of life. With growth of only 1.2 per cent forecast this year it is more important than ever for the government to adopt a laser-like focus on economic growth and competitiveness.
Thank you for the opportunity to address your Committee.
