Here’s how some Canadian business groups reacted to Thursday’s Fall Economic Statement from the federal government.
The government’s statement can be found here.
Canadian Federation of Independent Business
TORONTO, Nov. 3, 2022 /CNW/ – The Canadian Federation of Independent Business (CFIB) is disappointed the federal government’s 2022 Fall Economic Statement did not include any immediate measures to support small businesses on their long road to economic recovery. But the statement did provide reasons for optimism, including a plan to return to balanced budgets and a stronger commitment to reduce credit card processing fees for small business.
“Small firms need help right now in dealing with the crippling labour shortage and rapidly rising costs,” said CFIB president Dan Kelly. “Unfortunately, Ottawa is making their problem even bigger with significant hikes in Employment Insurance and Canada Pension Plan premiums on January 1, and carbon and excise tax hikes in the spring of 2023. There are zero measures in this document that will lower the tax pressures facing Canada’s small firms.”
“It is good news that the federal government is finally getting serious about delivering on its many earlier promises to lower credit card merchant fees,” Kelly said. Over three-quarters (78%) of business owners report credit card processing fees are unaffordable for their business, a situation that has been made worse by consumers shifting to digital payment methods and away from cash during the pandemic.
“While I’m concerned credit card fee relief may be too slow to help deal with the immediate inflationary cost pressures facing small business, the direction is positive and should encourage negotiations with card networks and banks towards an early deal. CFIB is especially pleased to see government plans to ensure businesses have a seat at the table in negotiating lower transaction fees specifically focused on small businesses,” Kelly added.
CFIB is also pleased the federal government introduced a pathway to a balanced budget. “Small business owners know that today’s deficits are tomorrow’s taxes, so getting us back to balance in the medium-term is important,” Kelly said.
“Sadly, there was no progress in addressing the crippling legacy of the pandemic debt carried by small business owners,” Kelly said. The average small business has taken on $144,000 in COVID-related debt, with most carrying a government-backed Canada Emergency Business Account (CEBA) loan. CFIB will continue its call to increase the forgivable portion of all CEBA loans to at least 50%, provide an additional year to repay the loan in full and allow the 50,000 businesses recently deemed ineligible to appeal the decision.
“With less than half of small businesses back to normal sales and nearly all of them facing significant cost, tax, inflation, interest rate and labour challenges, governments should be focused on making things easier, not harder for Canada’s entrepreneurs. And while credit card fee relief and balanced budgets are positive future steps, the Fall Economic Statement does not deliver the immediate relief small businesses need,” Kelly concluded.
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small and medium-sized businesses with 95,000 members across every industry and region. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.
Canadian Manufacturers & Exporters
OTTAWA, ON, Nov. 3, 2022 /CNW/ – The Fall Economic Statement released today by Deputy Prime Minister Chrystia Freeland acknowledges many key challenges facing Canada’s manufacturers, including labour shortages and investment incentive gaps caused by the US’ Inflation Reduction Act, but falls short on taking bold action to address them.
“This is a good first step, but Canadian businesses, and manufacturers in particular, cannot afford to wait years for government to address these major competitiveness problems. Other countries are pouring billions into their industrial sectors and are finding and training the workers needed to fill the jobs of the future. If Canada does not follow suit, we will lose out on manufacturing investment and the good jobs that come with it,” said Dennis Darby, President and CEO of CME.
Manufacturers are featured prominently in the FES and the government’s plans for future economic growth. CME is happy to see the government commit to investing in Canada’s advanced manufacturing competitiveness. Manufacturers look forward to discussing these issues with government directly.
Investment:
A new Investment Tax Credit for Clean Technologies equal to up to 30 per cent of the capital cost of an investment in low emission vehicles, low carbon heating equipment, and green energy generation will help industry in their net zero transition. Furthermore, investment tax credits for clean hydrogen of up to 40 per cent is moving forward and is good news for industry.
The Canada Growth Fund, a key initiative announced in Budget 2022 received more definition in the FES, however, manufacturers will need details and are eager for this program to get off the ground.
Labour and Skills Shortages:
On the labour and skills shortage front, industry was happy to see $250M announced for skills development through the new Sustainable Jobs Training Center and other ESDC initiatives. Moreover, $1.6B for processing and settlement of new immigrants including $50M in 2022-2023 to reduce immigration processing backlogs is welcomed and a direct ask of CME. Finally, $800M for youth job training and young Canadians will help manufacturers hire more students and co-op students and is part of CME’s request to promote our industry to youth and underrepresented groups.
Concerns:
The new 2 per cent tax of share buybacks. Canadian businesses do not need a new tax at this time and this proposed rate is double the US rate and will put Canadian firms at a tax disadvantage. Details of this new measure are still forthcoming, but this will not be welcomed news in industry.
“CME sees a lot in the FES that we can build on, but the clock is ticking, particularly on matching the manufacturing investment incentives found in the US Inflation Reduction Act. We will continue to expect, and push, for strong and decisive action to address all our challenges,” concluded Darby.
CME had detailed these and other needed measures in its 2023 pre-budget submission.
QUICK FACTS
- The manufacturing sector accounts for nearly 10 per cent of Canada’s real gross domestic product.
- Manufacturers employ 1.7 million people in Canada.
- Total manufacturing sales hit a record high of $718.4 billion in 2021.
Canadian Chamber of Commerce
(OTTAWA) – November 03, 2022 – The Canadian Chamber of Commerce’s President and CEO, Perrin Beatty, issued the following statement today in response to today’s Fall Economic Statement:
“Today’s Fall Economic Statement was an opportunity for the government to lay out a blueprint for how to create strong, sustainable economic growth. Unfortunately, it seems we will need to wait at least until Budget 2023 for details on a clear plan.
Although we welcome the commitment to fiscal prudence and the commitment to move towards a balanced budget, today’s statement was essentially a placeholder. We still lack a coordinated strategy to generate the investment required for strong growth.
We had hoped to see low-cost growth measures like a plan to eliminate longstanding barriers to interprovincial trade and to substantially reduce the regulatory burden. We also urge the government to produce an integrated plan to get desperately-needed food, fuel and fertilizer to global markets.
The Canadian Chamber welcomed the Minister’s announcement of measures to increase the supply of skills needed in our workforce to achieve net-zero and to provide tax credits for investments in clean technologies and clean hydrogen, as well as the commitment to reducing regulatory obstacles to investment in major projects.
Canadian business is anxious to work with the government to produce a comprehensive strategy for growth. Given the headwinds that Canada’s economy currently faces, that strategy is more needed than ever before.”
About the Canadian Chamber of Commerce — The Future of Business Success
The Canadian Chamber of Commerce is Canada’s largest and most activated business network — representing 450 chambers of commerce and boards of trade and more than 200,000 businesses of all sizes, from all sectors of the economy and from every part of the country — to create the conditions for our collective success. The Canadian Chamber of Commerce is the undisputed champion and catalyst for the future of business success. From working with government on economy-friendly policy to providing services that inform commerce and enable trade, we give each of our members more of what they need to succeed: insight into markets, competitors and trends, influence over the decisions and policies that drive business success and impact on business and economic performance.
(Mario Toneguzzi is a veteran of the media industry for more than 40 years and named in 2021 a Top Ten Business Journalist in the world and only Canadian)
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