On November 21, Canada’s Minister of Finance Chrystia Freeland presented the Fall Economic Statement in Parliament. The statement included many new measures that are meant to increase affordability and reduce federal debt.
“The Surrey Board of Trade applauds some of the measures implemented by the Federal Government, such as on housing, but we call for greater infrastructure investment in Surrey and in BC, specifically for transit and transportation,” said Anita Huberman, President & CEO, Surrey Board of Trade. “As the government prepares the 2024 Budget, we urge them to look at the Surrey Board of Trade’s 10 point economic plan.”
“Where is a national pharmacare plan and a commitment to a comprehensive review of Canada’s tax code?”
“The Surrey Board of Trade reviews all fiscal announcements made by federal, provincial, regional, and municipal governments to ensure that investments are being made for the business community and to monitor fiscally responsibility.”
Highlights of the federal Fall Economic Statement:
DEFICIT
– $40B in 2023/2024
– $38.4B in 2024/2025
AFFORDABILITY
– Strengthening tools and powers of the Competition Bureau to crack down on bigger companies and modernize merger reviews
– 30% clean technology investment tax credit to include systems that produce electricity, heat, or both from waste biomass
– 15% clean electricity investment tax credit to include systems that produce electricity or both electricity and heat from waste biomass
– Reduce non-sufficient funds fees charged by banks
– Crack down on junk fees
HOUSING
– New Canadian Mortgage Charter – guidance and expectations for how financial institutions work with Canadians to ensure payments are reasonable for borrowers; relief measures for holders in financial difficulty on principal residence from federally-regulated financial institutions
– Loans to build new rental units
– Removing GST from cooperative housing corporations for long-term rental and $309.3M in new funding for Cooperative Housing Development Program early 2024
– $15B in new loans funding starting 2025-26 for the Apartment Construction Loan Program
– Creation of a Department of Housing, Infrastructure and Communities
– Tying access to federal infrastructure funding to actions by provinces, territories, and municipalities to increase housing supply where it makes sense
– Government of Canada will leverage the Canada Infrastructure Bank to support the development of infrastructure required to build more homes
– Training and retaining Canadians and permanent residents who are ready to find jobs in the construction sector
– Working with provinces, territories, and post-secondary designated learning institutions, the Federal Government will also put in place a Recognized Institutions Framework that would reward learning institutions with high standards around selecting, supporting—including by providing access to housing—and retaining international students
SHORT-TERM RENTALS
– Deny income tax deductions for expenses incurred to earn short-term rental income, including interest expenses, in provinces and municipalities that have prohibited short-term rentals
– $50 million over three years, starting in 2024-25, to support municipal enforcement of restrictions on short-term rentals
– Deny income tax deductions when short-term rental operators are not compliant with the applicable provincial or municipal licensing, permitting, or registration requirements
FISCAL RESPONSIBILITY
– Economists indicate we will avoid a recession
Federal debt (per cent of GDP):
– Inflation expected to decline to around 3.75% by Q4 2024, with an average of 2.9% in 2025
LABOUR
– Remove the barriers to internal labour mobility, including by leveraging federal transfers, and other funding, to encourage provinces and territories to cut the red tape that impedes the movement of workers, particularly in construction, health care and child care, within Canada by:
o Creating full interprovincial labour mobility for construction and health care workers
o Expanding the Red Seal Program
o Using the $200 billion federal health care funding to ensure provinces and territories welcome health care professionals from anywhere in Canada
– Removing unnecessary federal exceptions in the Canadian Free Trade Agreement
EMPLOYEE OWNERSHIP TRUSTS
– For an owner that sells a business to an employee ownership trust, the first $10 million in capital gains realized on the sale of a business is exempt from taxation
DISCLOSURES
– The Department of Finance; Innovation, Science and Economic Development Canada; and Environment and Climate Change Canada will develop options for making climate disclosures mandatory for private companies
CROWN CORPORATIONS
– The government will be reviewing their roles and taking steps to increase risk appetite where appropriate
Read the full Fall Economic Statement here: https://www.budget.canada.ca/fes-eea/2023/report-rapport/FES-EEA-2023-en.pdf
Surrey Board of Trade 10 Point Economic Plan
HEALTHCARE
COVID-19 won’t be the last pandemic or disaster that we face. Governments can continue to unlock potential in primary care, digital and telehealth sectors to make these services efficient and accessible to all.
EDUCATION
Re-skilling and up-skilling must continue to be a priority. Governments need to continue to rethink and implement new learning and education systems. Best practices include adopting hybrid learning models, building skills-based learning modules, funding continuous learning courses, and creating virtual resource centres. Governments and employers can also foster an effective re-skilling ecosystem that includes micro-credentialing for lifelong learning.
INTERNATIONAL TRADE & SUPPLY CHAINS
Companies will need to make their supply chains more resilient—for example, by reducing the number of unique parts, building in redundancy across suppliers, near-shoring, and regionalizing supply chains. In addition to securing health equipment and essential food supplies, governments can help companies increase their resilience. At the same time, governments may need to consider the policy implications of remote working in the knowledge economy: as exports of highly skilled services grow.
STIMULUS
Stimulus needs to work. Some best practices could include expanding green energy and energy efficiency; accelerating government digitization and offering companies incentives to adopt new technologies; and shaping the workforce of the future to increase resilience in the face of rising automation.
GOVERNMENT EFFICIENCY
Deliver contactless government. The COVID-19 pandemic has made digital transformation a priority— digital channels have become more important, and citizens and customers increasingly prefer them. Examples of best practices include automating daily data collection from key operators to closely monitor and support decision making about critical food items at risk, as well as the use of “express digitization”— rapid development of automated online platforms.
FINANCIAL ACCOUNTABILITY
Manage government balance sheets with an investor mindset. Many countries have applied traditional debt issuance, revenue optimization, and expenditure control to address the immediate challenge, all of which can be further optimized. Over the medium term—one to three years—governments could monetize the assets on their balance sheets, a strategy that represents a largely untapped and potentially greater opportunity to raise additional revenue and reduce deficits.
PREPARE FOR THE NEXT CRISIS NOW
Institutionalize best-practice crisis response to prepare for the next crisis. The COVID-19 crisis has pushed many countries to identify and start creating the elements of an effective local outbreak response. Several governments have established crisis nerve centres, enabling coordination of multiple work streams across existing crisis-response structures in government and society for greater response. Establish a plan-ahead crisis unit (for example for an earthquake or flood) —a cross-functional team freed from day-to-day crisis management that looks ahead and considers simulations of various scenarios.
DATA & ANALYTICS TO HELP ALL BUSINESSES AND REDUCE CITIZEN INEQUALITIES
Make faster, better decisions using data and analytics. Assemble cross-functional teams to develop analytics solutions for faster responses to changing situations and emerging risks and issues. Next practices might include applying advanced use cases in data and analytics, such as nowcasting—forecasting the near future, present, and even the recent past using frequently measured indicators—to inform policy and decision making.
GOVERNMENT EMPLOYEES – A SMARTER WAY TO WORK
Cultivate smarter, more productive ways for public servants to work. Automation could strengthen public-service productivity and move significant numbers of public servants from back-office jobs into more valuable and meaningful citizen-facing roles.
PRIVATE SECTOR PARTNERSHIPS ARE ESSENTIAL
Partnering with the private sector and multinational institutions to design and implement well-structured stimulus measures, can help government prepare workforces for a technology-focused future and improve the long-term competitiveness and resilience of key industries.
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Anita Huberman, 604-634-0342, anita@businessinsurrey.com
