Though last night’s Budget was branded as a dressed-up version of previous proposals, it was fairly well received.
But, while the provisions introduced do build on both past and ongoing initiatives by the federal government, some major players have concerns. This is particularly the case when it comes to the possible affects of the crackdown on several tax loopholes, for instance.
Commentary continues to come out of the woodworks, so check out a compilation of the reactions so far below.
Also, scroll to the end to listen to Flaherty’s speech post lock-up if you missed it.
Investment Industry Association of Canada
First and foremost, public finances remain firmly under control. This year’s budget deficit of $25.9 billion [will be balanced] within three years, and public debt as a share of GDP will fall below 30% in four years.
“Strong finances and competitive tax rates have been achieved over a period of difficult economic conditions at home and abroad,” says Ian Russell, president and CEO, IIAC. “Canada is well positioned to further strengthen its competitive position.”
The IIAC is disappointed not to see a more broadly based incentive for small business capital raising, however.
Canadian Life and Health Insurance Association
The CHLIA is concerned about tax measures applied to annuities and loan arrangements involving life insurance policies.
Nonetheless, it does support the following provisions:
- The recognition of the strength of the Canadian financial services sector and the need to promote it in international markets.
- The opportunity for the insurance industry to enhance long-term investments through the Canadian P3 market.
- The broadening of the residency options for board members so they reflect the scope of our financial services corporations.
- A focus on long-term bond issuances by the Canadian government over the next decade.
Read: Must-reads on insurance
The Canadian Chamber of Commerce
The measures announced in today’s budget support the federal government’s attack on Canada’s skills challenges. The Canadian Chamber of Commerce says it paves the way for a more activist approach.
“The skills problem leads our list of [the top] critical barriers to Canada’s competitiveness,” says Perrin Beatty, president and CEO of the Canadian Chamber of Commerce. “It’s showing up all across the country, in every industry.
He adds, “We think [erasing the deficit 2015] is going to be tough, but it’s essential. Much of our recent economic success is tied to our reputation as a prudent country that follows through on fiscal plans.”
Canadian Federation of Independent Business
“This is a good budget for small business,” says CFIB president and CEO Dan Kelly. He adds it delivered on several top issues for small firms, including:
- Renewing and expanding the Employment Insurance Hiring Credit by 50%;
- Enhancing the Lifetime Capital Gains Exemption to $800,000, and indexing it to inflation;
- Extending the accelerated capital cost allowance for machinery and equipment for two years;
- Making progress on red tape, particularly at the CRA; and
- Addressing unfair sick leave provisions.
The CFIB is concerned, however, over the planned change to the dividend tax credit. “It will be important for us at CFIB to gauge the reaction of small firms to this technical tax change in the context of the other important wins,” adds Kelly.
Certified General Accountants Association of Canada
“The government delivered a responsible budget for uncertain times,” says Anthony Ariganello, president and CEO of CGA-Canada.
He approves of the Canada Job Grant, which the government claims 130,000 Canadians could benefit from each year, and he says the government made good on promises related to the deficit and infrastructure.
Also, strengthening compliance and stopping international tax evasion was a theme highlighted by the Finance Minister. But, Ariganello warns, “The absence of any clear message on tax simplification is sending the wrong signal if Canada is to remain competitive, attract investment, and create jobs and economic growth. We need tax reform now!”
Canadian Centre for Policy Alternatives
This group disagrees with CGA-Canada, saying the Budget actually reduces infrastructure spending.
It adds the Building Canada Fund has been reduced to $210 million in 2014-2015 from its previous level of $1.25 billion a year. It’s also back-end loaded, with 75% of expenditures to be spent in or after 2020.
CCPA also finds additional funding for infrastructure in the Budget is merely an announcement of pre-existing programs.
It would have preferred the government took “bold action on infrastructure [since] interest rates are at historic lows and the need for infrastructure investment has never been greater. This Budget puts it off until 2020,” says David Macdonald, senior economist with the CCPA.
What’s more, he adds, “Canada doesn’t have a deficit problem, it has a growth problem, and government austerity is part of the problem, not the solution. You can’t cut your way to growth.”