Federal Budget Response

Surrey Board of Trade Says New Federal Budget Is an Investment Budget  — Good for National and Local Economic Infrastructure Stimulus

The Surrey Board of Trade congratulates the new Federal Finance Minister Bill Morneau on tabling the first Federal Liberal Budget.

“The Surrey Board of Trade wanted to see infrastructure spending, small business tax breaks, climate action and housing. This is a stimulus budget incurring deficits to address a variety of needs highlighted in the Fall election Liberal platform. We recognize the need to stagger federal investments over multiple priorities over several years,” says Anita Huberman, CEO of the Surrey Board of Trade. “Investments in Transportation and Education, as the core philosophies of the Surrey Board of Trade’s strategic plan, were important.”

Surrey Board of Trade Federal Budget Highlights


“The Public Transit Infrastructure Fund will provide needed federal support for Surrey’s proposed construction of the Light Rail project,” said Huberman. “The federal funding for accelerated design, implementation and construction work for new large-scale projects, such as new light rail transit lines in Surrey and Metro Vancouver coupled with the new innovative direction to get projects moving quickly by having the Federal Government fund up to 50% of eligible costs for projects could prove well for Surrey’s Light Rail Transit vision.”

Total infrastructure investment includes:

$11.9 billion over five years to modernize and upgrade infrastructure systems, including transit and water
$3.4 billion over three years to upgrade and improve public transit systems across Canada
$5.0 billion over five years for investments in water, wastewater and green infrastructure projects across Canada
$3.4 billion over five years for social infrastructure, including affordable housing, early learning and child care, cultural and recreational infrastructure, and community health care facilities on reserve
The Surrey Board of Trade noted that Funding under the program will be allocated to municipalities based on ridership with B.C. at 13.63% (share of national public transit ridership) equaling $460,490,000.

“The Surrey Board of Trade looks to the provincial government’s decision to work with the Mayor’s Council on how to move needed transit and transportation projects forward. The full 27km vision for Surrey’s Light Rail Transit line is what Surrey needs to build and connect our communities – and attract business.”


Skills are the number one challenge for Canadian business, including Surrey businesses. The Surrey Board of Trade appreciates the additional investments of $125 million for Labour Market Development Agreements, alongside $50 million for the Canada Job Fund Agreements. These provide a range of training and employment programs.

Budget 2016 will also provide $85.4 million over five years to support union-based apprenticeship training. In addition, it will strengthen co-op and on-the-job opportunities for young people. “However, the Surrey Board of Trade needs industry to commit to partner to train apprentices.”

In the 2016 budget, there is $2.26 billion of funding announced, almost all of it destined to Canadian universities via the strategic infrastructure investment fund. This is welcome; however, Canada’s public sector expenditure on research and development is already among the highest in the OECD. The trouble is that Canada lags in commercialization, in venture capital and in growing technology businesses beyond a certain size. The government’s support for private sector innovation was modest, with additional support for incubators and an extra $50 million for the National Research Council’s Industrial Research Assistance Program.

In 2016, the government will launch its Innovation Agenda, a “bold new plan” that will redesign and redefine how it supports innovation and growth. We cannot wait.


The deferral of further reductions on small business taxes and reductions in EI premiums is understandable but we would encourage the government to establish a timeline for when further reductions can be achieved to allow small business to assist in the growth required to make this budget successful over the long term. The Employment Insurance premium rate will decrease from the current 1.88 to 1.61, instead of the previously planned 1.49, due to the deteriorating economy and additional costs in the expansion of EI eligibility.

The Surrey Board of Trade noted that a push back on the small business tax and increasing CPP, as businesses struggle, could slow down job creation and investment.

The previous budget legislated that the Small Business Tax rate would fall by 0.5% per year from 11% to 9% in 2019. The rate is currently at 10.5%, and the government has deferred the decreases that were coming in future years. There was no date or estimate given for the duration of the deferral. This means that small businesses across the country will pay over $1 billion more than expected.

The government has also tightened the rules so that investment income is no longer eligible for the small business rate. Also, the budget announces new rules so that partnerships and corporate structures cannot be used to separate businesses into smaller entities that qualify for the lower rates.


The Surrey Board of Trade noted that the government clearly thinks that there is massive tax evasion going on. The budget will spend $444 million over five years to crack down on it, and the government expects to raise $2.6 billion. The government is so confident in the amount it can collect that the budget includes it as revenue.


On the Canada Pension Plan, which could bring about a significant increase in payroll taxes, the government will launch consultations with Canadians in the coming months. The government maintains its goal of coming to a collective decision with the provinces and territories on enhancing the CPP by the end of 2016.


The budget deficit will reach $29 billion this year and next, before gradually declining to $14 billion in 2020. At 1.5% of GDP, Canada’s deficit compares favourably to Europe (3.3%) or the U.S. (3.9%), but a significant deterioration from the $3.4 billion back in November.

The arguments for increased spending do resonate: borrowing costs are cheap in this low interest rate environment, and austerity in the midst of economic weakness can be self-defeating. But if we suddenly withdraw the need for caution, we’ll go down the path of too much spending as we have before.

We should point out that if the government can achieve its deficit targets then the overall debt-to- GDP ratio will fall from 2017-2020 simply because the economy will be growing faster than the debt. But this will take tremendous discipline.


The government said that Phase 2 of the infrastructure plan, which will contain the fast, efficient trade corridors allowing Canadian exporters to benefit fully from international trade and measures to modernize the economy, will be announced in the next year.


$1 billion in funding over the next four years will be allocated to support clean technology in the forestry, fisheries, mining, energy, and agriculture sectors. Also included for environment, is $2 billion over two years to establish the Low Carbon Economy Fund, which will assist provinces and territories with reducing greenhouse gas emissions. Accelerated Capital Cost Allowance rates will be expanded for a variety of clean energy technologies, including electrical energy storage and electric vehicle charging.

The government is proposing $14.2 million to the Canadian Environmental Assessment Agency as well as $16.5 million to the National Energy Board and Natural Resources Canada to improve consultations and environmental assessment processes.


Every community in Canada can benefit from tourism. Surrey is a sports destination city. The government’s announcement of an additional $50 million investment in Destination Canada over the next two years to improve the marketing of Canada as a tourist destination is quite welcome.


The Government of Canada confirmed today that it plans to allocate additional funding to the National Film Board in the amount of $13.5 million for the next 5 years, $1.5 million in 2016‒2017 and $3 million in subsequent years. The NFB’s total annual budget will be $61.5 million (2016‒2017) and $63 million in the years following. This announcement, made as part of the 2016‒2017 Federal Budget, confirms that culture and creativity are a priority for the government. The CBC also had renewed funding.

“And so for cultural industries locally and nationally we are going to see a renewed commitment to our creative and innovative arts and culture work which will enhance our presence and the impact of our works on the Canadian public and the entire world.”


Canada’s economy is facing huge challenges. Weak energy and commodity prices are likely to persist at least through 2017. Canadian consumers are among the most highly indebted in the world and the housing market is overvalued in many communities especially in Metro Vancouver. Canada can no longer rely on the traditional sources of growth—natural resources and consumer spending—that powered the Canadian economy over the past decade. To continue to grow and to improve our standard of living, the Canadian economy must succeed in exporting, in creating new businesses, and in commercializing the technologies of tomorrow. Our number one priority in Surrey, and as it should be for Canada, has to be the improvement of productivity and innovation. The Federal Budget’s stimulus is positive, however, we need to ensure that job creation, business sustainability, business attraction, and more innovation occur at the same time. A flourishing business sector will get more Canadians into high paying, highly skilled jobs and provide the tax revenues to pay for the social programs we need. The economy and our social programs go hand in hand. On a cautionary note, the Surrey Board of Trade, though agreeable on short-term spending, also urges the federal government to balance the budget soon—at least in the 3rd or 4th year of the new government’s term.

The Surrey Board of Trade will be forwarding specific budget information to our 11 Advocacy Teams to evaluate specific details within the budget and assess the impact on our members and businesses in Surrey. The budget still needs to be passed by the Federal Government.

For the full Federal Budget document go to: Federal Budget 2016


For more information contact Anita Huberman, CEO, at or 604.340.3899.