Reaction to the federal budget came swiftly from several industry associations, accounting firms and advocacy groups. Here’s a selection of their thoughts:
The association supports the long-term vision in the federal budget.
“We have not had a strong recovery since the 2008 financial crisis, and only modest growth is expected over the next few years. However, the budget has addressed the need to encourage sustained private sector growth and job creation in the country, and put health, education and social programs on a sound footing,” says Ian Russell, IIAC president and CEO. “In that regard, this budget is different from those of the past.”
The Association agrees with the Finance Minister’s observation that small and mid-sized businesses continue to have difficulty raising equity capital for start-up and expansion. “IIAC encourages the government to direct the planned $400 million to help increase private-sector risk investments to a market-driven tax incentive to attract investors and benefit businesses,” says Russell. “We look forward to participating in consultations.”
The Canadian Life and Health Insurance Association said it is pleased the government vowed to introduce legislation requiring federally-regulated employers to provide long-term disability insurance to employees.
“This is extremely meaningful for Canadian employees who work for companies under federal jurisdiction. Insuring LTD plans is the only way to fully protect those who become disabled if their employer goes bankrupt,” says Frank Swedlove, president of the CLHIA. “We believe the provinces should adopt similar legislation so all workers are protected.”
The 2012 federal budget had some positive news for small businesses. However, this budget did not go fast or far enough in dealing with spending, the federal deficit or public service compensation and pensions.
“We were disappointed in the baby steps taken by the federal government to restrain its spending,’ comments Swift. “While there has been a lot of talk about the amount of spending reductions in this budget, overall program spending continues to rise.”
Today’s federal budget brought both a message of growth and change to the Canadian tax system, positioning Canada for fiscal sustainability, says KPMG. As predicted by KPMG on February 29, the Budget includes cuts to government programs, including the retirement income system, Old Age security and R&D tax incentives.
“The government is looking to support innovation in Canada using a markedly different funding model,” says Elio Luongo, Canadian managing partner of Tax with KPMG in Canada. “Today’s budget announced the first steps in implementing the government-commissioned Jenkins Report.”
CARP says its members will be disappointed the government ignored its call to leave OAS alone or at least make provision for those who will depend on it. Even those resigned to its changing would rather see the threshold adjusted as opposed to an increase in the age of eligibility.
“The prospect of waiting two additional years before receiving OAS has alarmed especially low income earners who do not readily see how they can change their circumstances no matter how long it takes to phase in the changes,” says Susan Eng, vice president of advocacy. “Nonetheless, CARP members would rather the government look elsewhere for budgetary savings.”
Certified Management Accountants of Canada says it’s pleased with the overall direction of the 2012 budget.
“The government should be congratulated for introducing a number of good measures to improve Canadian innovation and focus research and development resources,” said Joy Thomas, MBA, FCMA, president and CEO of CMA Canada. “These are areas CMA Canada stressed in the pre-budget process.”
CMA Canada has recommended a number of measures to improve the Scientific Research and Experimental Development (SR&ED The 2012 budget addressed a number of measures to enhance commercialization, most notably, making the Business-Led Networks of Centres of Excellence program permanent and also making the Canadian Innovation Commercialization Program with increased funding.
CMA Canada hopes the government will build on these measures in coming budgets. CMA Canada recommendations include:
- Bringing in a program of repayable grants to help companies accelerate the commercialization of their inventions;
- Developing a national “creator-ownership” policy where professors and students own their creations, as is the case in some universities.
“This budget has introduced a number of programs which integrate high-quality researchers into the business world and access inventions originating there,” said Ms. Thomas. “But much more needs to be done to commercialize the research coming out of universities.”
CMA Canada notes that the government has introduced a number of measures to ease labour shortages in high-demand sectors, improve youth skills training and connect skilled older workers with available jobs. However CMA Canada continues to recommend that the government implement more basic skills and literacy programs for adults so they can participate in a knowledge economy.
“Now that the government is gradually increasing the retirement age to 67 from 65, it is imperative that older workers have access to skills and training required for skilled, well-paying jobs throughout all their working years,” said Ms. Thomas.