Businesses need to reduce their costs, need skilled talent to drive innovation and maximize the potential of trade deals. The costs that are hurting our businesses the most are taxes, both the rates and the cost and time to file them in addition to regulatory compliance.
“Surrey, a small and medium sized business community, creates a sizable portion of private sector jobs. Surrey is a destination of entrepreneurialism and innovation through diverse industry sectors including health technology and manufacturing,” said Anita Huberman, CEO, Surrey Board of Trade.
“In order for Surrey’s economy to thrive, it takes all three levels of government working together to ensure that programs, policies, and taxes are not onerous for business. To that end, we looked to the Federal Budget to reduce red-tape, ensure tax fairness, and to provide the funding supports for necessary social and transportation infrastructure.”
“The concern in relation to the projected $19.8-billion deficit for the 2019-20 fiscal year remains, with limited revenue innovation and growth, and continued investments in transportation infrastructure.”
“The Surrey Board of Trade also wanted to see a clear strategy to move the Trans Mountain pipeline forward, given the significant investment made by Canadian taxpayers.”
“The Surrey Board of Trade did see new program spending though that would help businesses deal with today’s local and global economic challenges, coming during a period of economic uncertainty and as growth cools.”
The Surrey Board of Trade observed that the Federal Government is:
· Investing in moving the pharmacare agenda forward
· Helping workers learn new job skills
· Easing the burden on first-time home buyers
· Investing in increasing housing supply
· Investing in training programs
· Investing in an international education strategy
· Enhancing CPP
· Expanding the Global Talent Stream to access global talent
· Eliminating the income threshold for accessing the enhanced Scientific Research and Experimental Development (SR&ED) Tax Incentive Program to encourage business innovation by providing an investment tax credit for businesses of all sizes
· Investing in the forestry sector
· Supporting the Strategic Innovation Fund for the Clean Resource Innovation Network
· Directing more funding towards Western Economic Diversification Canada.
· Supporting tourism investments into a Canadian Experiences Fund to create, improve or expand tourism related infrastructure
· Reducing red tape through Regulatory Roadmaps
· Supporting the production, promotion and distribution of Canadian music
· Investing in Canada’s critical cyber systems – business needs to be included
· Investing in improving emergency management in Canada – floods, fires, wildfires, earthquakes pre- and -post
· Supporting supply managed farmers
· Addressing CRA challenges
FEDERAL BUDGET 2019 EVENT IN SURREY: March 26, 2019
With Amarjeet Sohi, Minister of Natural Resources from 7:30am – 9:30am – Civic Hotel
FEDERAL GOVERNMENT BUDGET REPORT
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For more information contact, Anita Huberman, CEO, Surrey Board of Trade
604-634-0342 or 604-340-3899 or anita@businessinsurrey.com
MORE ANALYSIS:
The Surrey Board of Trade’s more detailed observations on the top priorities for the organization and its members are:
ON AFFORDABLE HOUSING
The Federal Government has revealed the First-Time Home Buyer Incentive. The Incentive would allow eligible first-time home buyers who have the minimum down payment for an insured mortgage to apply to finance a portion of their home purchase through a shared equity mortgage with Canada Mortgage and Housing Corporation (CMHC). A 10% equity mortgage for newly constructed homes or 5% shared equity mortgage for existing home will be offered to qualified first-time buyers.
“Millennials unable to make a 20 per cent down payment of the home’s purchase price will now have an opportunity to afford more because monthly mortgage payments would be lower. Young people have been moving away from cities that they grew up in to buy a home for their families, and now they will be able to stay and work in those cities.”
“This 10% equity mortgage for newly constructed homes may incentivise the constructions of new homes to increase the housing supply.”
“The Surrey Board of Trade is watching to see what the eligibility criteria will be for this incentive to see whether this will truly benefit the working millennial.”
“We welcome the Housing Supply Initiative with funding of $300 million, Rental Construction Financing Initiative of an additional $10 billion in financing over nine years, and the support of the Expert Panel on the Future of Housing Supply and Affordability. All levels of government need to work together to tackle the housing crisis, and these initiatives are a step in the right direction.”
ON PHARMACARE
The Federal Government will move forward with three recommendations provided by the Advisory Council on the Implementation of National Pharmacare, which was released on March 6:
1. The creation of the Canadian Drug Agency, which will be a national agency to build on provincial and territorial successes.
2. The creation of a national formulary – a comprehensive, evidence-based list of prescribed drugs.
3. The implementation of a national strategy for high-cost drugs for rare diseases.
“This is welcome news to the Surrey Board of Trade and its members,” said Anita Huberman. “We began our advocacy four years ago when we realized just how much businesses are paying for drugs. Removing that cost item off their bottom line will be very welcome. We want to ensure that all community members, employers, employees, their families, and their neighbours, are able to access the medications they need to gain and maintain their health.”
“The Federal Government must work in tangent with the provinces to create a national, single-payer universal pharmacare program.”
ON BUSINESS TAXES AND COMPETITIVENESS
SMEs are still unhappy with the current tax climate. The CRA audits are ramping up and are becoming increasingly burdensome on businesses. Additionally, the competitiveness of the corporate tax rate is insufficient when compared to those of the United States.
“There were no significant tax changes to make us more competitive with the US. With an increased emphasis on tax enforcement, SMEs will see an increased administrative burden jeopardising economic growth.”
The Surrey Board of Trade hoped to see a full reform of the tax system.
CRA – Canadians deserve to receive prompt, high-quality service in their interactions with Government, including when dealing with the Canada Revenue Agency (CRA). In recent years, the Government—responding to Canadians’ concerns about unacceptable delays and other service challenges—has taken steps to ensure that CRA services are fairer, more helpful, and easier to use. This includes a significant investment in Budget 2018, in which the Government provided $206 million over five years to improve CRA services, and committed to undertake a review of the CRA service model to ensure that Canadians receive the help they need and the good service they deserve.
Budget 2019 proposes to invest an additional $50 million over five years, starting in 2019–20, in two key initiatives:
Every year, at the request of individual tax payers, the CRA processes more than two million adjustments to T1 returns post-filing. Though the volume of changes makes some delay inevitable, Canadians are often frustrated by the time it takes to process these adjustments; in fact, this was a key concern highlighted by the Taxpayers’ Ombudsman in her 2018 report. By investing $34 million over five years to hire additional staff, it will be possible to make these adjustments more quickly, reducing frustration for taxpayers and ensuring that vulnerable Canadians do not encounter unnecessary delays in calculating the credits and benefits to which they are entitled.
ON BALANCING THE BUDGET
The continued deficit budget is concerning with a projected deficit of $19.8 billion but the federal debt-to- GDP ratio is expected to decline. The 2015 election campaign promised to eliminate the deficit by 2019. The concern is that the federal budget is running successive annual deficits.
ON INTERNATIONAL TRADE
Middle class growth and economic success depend not only on the hard work of Canadians, but also on the opportunities created by strengthening our trade connections in an increasingly globalized world. Through Budget 2019, the Government is committed to deepening Canada’s trade relationships with modern, progressive free trade agreements, including a firm commitment to advancing a new and modernized CUSMA, maximizing new opportunities offered by the Canada-European Union Comprehensive Economic and Trade Agreement, the signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, and the pursuit of new relationships with other large and emerging markets.
The Surrey Board of Trade is calling for a contingency fund to prepare for global economic uncertainty (that means the Federal Government needs to reduce their deficits and create revenue opportunities). Maybe that will come to fruition now with the legalization of cannabis.
ON PUBLIC SAFETY
Budget 2019 proposes to provide the RCMP with:
$508.6 million over five years to support policing operations
$77.3 million over five years and $13.5 million ongoing for enhanced law enforcement at the border
$68.9 million over five years and $20 million ongoing for enhanced federal policing capacity, including to fight money laundering
$11.5 million over three years to support transportation security
$5.7 million over five years and $1.2 million ongoing to protect national economic security.
ON WORKFORCE SKILLS DEVELOPMENT & EDUCATION
With evolving technology and improved business practices, employees need continuous learning to keep up with the demands of the job. Helping Canadians boost their job skills was a highlight of the 2019 budget.
The 2019 Budget introduced the Canada Training Benefit, which has three important components:
1. Canada Training Credit: Eligible workers between the ages of 25 and 64 would accumulate a credit balance at a rate of $250 per year, up to a lifetime limit of $5,000 to be used to refund up to half the costs of taking a course or enrolling in a training program.
2. Employment Insurance (EI) Training Support Benefit: Workers will be provided up to four weeks of income support through the EI system, launching in 2020, to help workers on training leave and not receiving their regular paycheque cover their living expenses.
3. Leave Provisions: Workers will be able to pursue training and not worry about whether their job will be there once training completes.
“The Surrey Board of Trade has worked with numerous stakeholders, businesses, and educators in addressing the growing skills shortage. We appreciate the work the Federal Government will begin to address the skills gap and assisting workers in learning while being employed.”
“The Federal Government will also be introducing the EI Small Business Premium Rebate to offset the increased costs on employer premium rates resulting from the Employment Insurance Training Support Benefit. This is welcome news. More and more businesses are discovering the difficulty in finding workers with the right skills for the job. Businesses must be included in the conversation when addressing this problem.”
On supporting education and skills development, Budget 2019 will improve flexibility for vulnerable student loan borrowers, such as students with permanent disabilities, able to access the Canada Student Loan Program. The Federal Government is also lowering the interest rates for Canada Student Loans and Canada Apprentice Loans and making the first six months after a borrower exits post-secondary education interest free.
Budget 2019 will see the launch of a modernized Youth Employment Strategy that helps youth gain the skills and experience they need to find a job by offering a suite of supports tailored to their needs. The government will be investing in work-integrated learning by expanding the Student Work Placement Program, investing in additional placement opportunities, and partnering with the Business/Higher Education Roundtable to support up to 84,000 new work placements per year by 2023-24 for post-secondary students across Canada. It will be made easier for workers and employers to navigate the wide variety of skills development programs and ensuring that the programs reflect employers’ needs by simplifying access to skills programming and emphasizing skills innovation and experimentation with partners to ensure programs respond to changing labour market needs. Improving employment of persons with visual impairments will also be actioned in the 2019 Budget.
SUPPORT FOR ARTS, CULTURE, AND DIVERSITY
The 2019 Federal Budget introduced expanding the funding available for artists and cultural events by $31 million.
“The Surrey Board of Trade has always advocated for expanding the amount of funding available to artists and art organizations. This expanse in funding is, however, a band-aid for the waning arts and culture in Canada. There needs to be a comprehensive approach to work with local communities, and the province to bolster the arts in Canada, and fight US dominance of Canadian content.”
AGRICULTURE
Budget 2019 proposes up to $3.9 billion in support for supply-managed farmers:
Support will be offered to sustain the incomes of eligible dairy, poultry, and egg farmers, by making available up to $2.4 billion. Of this amount, $250 million has already been provided to support dairy farmers as a result of CETA, therefore a net amount of up to $2.15 billion will be available in coming years to deal with income losses associated with these agreements; and
Assistance will also be offered to protect the value of investments made by farmers in supply-managed sectors, through a Quota Value Guarantee Program that will protect against reduction in quota value when the quota is sold. $1.5 billion has been set aside for this demand-driven program.
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