Business groups urge tax cuts, less red tape ahead of federal budget

OTTAWA · Canadian businesses have submitted their priorities to Ottawa ahead of Thursday's federal budget, with tax reform, less red tape and measures to turn economic ambitions into investment topping their lists. Interviews and pre-budget submissions to the House of Commons finance committee revealed seven key themes. Business leaders want changes that make Canada more competitive globally and encourage companies to spend money domestically. They are also calling for concrete steps to move from government announcements to actual construction and jobs.

Dan Kelly, president of the Canadian Federation of Independent Business, said small businesses are struggling with rising costs and feel overlooked. His group wants the small-business tax rate reduced to six per cent from nine per cent. It also seeks to raise the income threshold for that lower rate to $700,000 from $500,000. "A lot of small companies, their biggest expense line is payroll," Kelly said. "Payroll taxes are really hard because they're direct taxes on jobs." He proposes lower employment insurance premiums for small businesses.

The Business Council of Canada is calling for taxes to be more competitive with those in the United States. Goldy Hyder, the group's chief executive, said competitive corporate, personal and capital gains tax policies attract investment. "You measure outcomes, not intentions," he said. "We need to see the investment come, we need to see the deployment of our own capital." The Canadian Chamber of Commerce is seeking changes to Canada's implementation of the global minimum tax and rules limiting interest deductions on business loans.

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"If there's a word that goes with this budget, it's competitiveness," said David Pierce, vice-president of government relations with the chamber. "We may not like the U.S. administration but what they're doing is making it very competitive, very attractive to deploy capital, to hire, to buy equipment and ... I would argue we need to beat it." Pierce said the uncertainty from the ongoing trade dispute with the United States is affecting business decisions. He called for continued support for tariff-affected industries and more help for businesses to diversify into new export markets.

Dennis Darby, head of Canadian Manufacturers & Exporters, said Ottawa needs to deliver faster, more predictable regulatory approvals. "The degree to which the risk on the investment is less, the more likely companies are going to put money on the table," said Darby. "What Canadian manufacturers need is really to move from announcements to execution." Kelly welcomed Ottawa's proposed target of eliminating $2 in regulatory costs for every $1 in new costs but said the government must follow through. "I've been doing this for 32 years at the federal and provincial level and I've seen more false starts on red tape reform than I have successes," Kelly said.

Access to skilled labour is another key priority for businesses. "Even in the current environment, manufacturers still tell us in every survey we do, 'I can't find the people with the skills I need,'" Darby said. The Business Council of Canada wants training for Canadians already in the workforce prioritized before turning to targeted immigration. "First, get your home base right and then think about what comes after that," Hyder said. Kelly said reducing payroll costs could give small businesses more room to train workers and raise wages.

Some business groups are calling for relief to ease inflationary pressures on companies and consumers. The Canadian Home Builders' Association called for extending the federal GST rebate on new homes to all buyers rather than just first-time purchasers. The association also wants Ottawa to expand agreements with provinces to lower development charges and reduce construction costs. It said it "supports any action that will bring down costs, cut red tape, and build more homes quickly." Hyder said removing interprovincial trade barriers and improving labour mobility would help strengthen the economy.

The Canadian Steel Producers Association called for stronger measures to protect domestic steelmakers from unfairly traded imports. "We'd look forward to anything that can help us have a level playing field so we can get to building all of the big projects that the federal government has envisioned for Canada," said Blair Dickerson, president of the group. Dickerson also called for stronger Buy Canadian policies to ensure major infrastructure projects use domestically produced steel. "We're big on Buy Canada," she said. "We need to make sure that there are Canadian components in everything we're building." The Energy Council of Canada said Ottawa should promote Canadian energy exports to attract investment.

With files from The Canadian Press and BNN Bloomberg