Entries in budget (2)

Wednesday
Jan202016

We need a business budget in Ontario

Open the envelope or email of an official letter from the Peterborough Chamber of Commerce to the provincial government on the 2016 pre-budget consultations and what you would find are four key points. Included would be the growing pressure of legislative burden on the Peterborough business community, the need for infrastructure that improves how we get our products to market, the ability to retain and hire skilled talent, and the willingness of the province to become more efficient in its ways.  

The Chamber Network is often asked what we see as the role of government. Quite simply it is this: provide the framework in which business can operate at a highly competitive level and in doing so have the ability to create and retain highly skilled talent.  There is no expectation from the business community for government to create jobs.  The expectation from the business community is that the chosen framework respects the need for transparency and a certain amount of flexibility as it is applied to the industries that make up Ontario’s economic sphere.  

Cumulative Burden

This is essentially the piling-on effect of various pieces of legislation or policy directives from several different government ministries where the impact is felt directly at the business or private sector level.  Among those pieces of legislation and directives are hydro prices, yearly minimum wage increases, the proposed Ontario Retirement Pension Plan, the College of Trades, WSIB premiums, and cap and trade to name a few of the new input costs facing businesses.  

Through the Ontario Chamber of Commerce, chambers such as Peterborough have been pushing for more inclusion in the regulatory approach that will result in achieving goals that are mutually beneficial.  

One of the major roles of the private sector is to drive the economy.  This roadway, rail, or boat on which the private sector is travelling needs to be fairly barrier free with opportunities to offer input.     

Infrastructure

Infrastructure is a major player to success in the private sector and the Ontario economy. In the Peterborough
area we know that infrastructure deficits are real. If our built infrastructure such as roads, bridges, rail and sewers is in poor condition it has a negative impact on a business' ability to get products to market and to bring imports to the area.   

Infrastructure includes not only those built pieces, but the telecommunications lines and the system that carries our energy to our businesses. Essentially infrastructure is how we move people, goods, information and power to keep our economies chugging along.

The provincial and federal governments have made infrastructure commitments and the Peterborough Chamber urges them to identify projects that will propel economies forward, projects that will create and open up regions to new possibilities, and projects that will foster connections between all sizes of communities.

 

Take the Ontario Chamber of Commerce Survey on the 2016 Provincial Budget

 

Skilled Talent

The needs of employers in this sphere are challenging and diverse.  There is no one-size-fits all approach that seems to have bridged the gap. In the trades, the apprenticeship system is complicated and not always
easy to navigate for employers or those choosing a career in the trades. Those employers with businesses in smaller municipalities and centres are further disadvantaged by ratio requirements. For those with minimum wage jobs to offer, they have to be able to incur the yearly pressure from minimum wage hikes before they consider adding an employee.    

Ontario’s fiscal situation 

The province is running a $10.3B deficit.  While meeting deficit elimination targets are important, understanding and knowing the plan past 2017-2018 is also an significant piece of the puzzle.  What measures will be put in place to create more sustainable levels?  The Chamber Network has offered a number of ways to move forward including program reviews and means-testing, and discussions with the federal government that would result in mitigating the $11B gap in the share of federal funding Ontario receives versus the federal revenue it collects.  

At the end of the day, Peterborough businesses are looking for a province that is flexible and able to
anticipate changes in the marketplace in a way that doesn’t slow down the economic wheel, but rather improves its efficiency and function, so that Ontario reaps the benefits.   

Comment through the "Peterborough Chamber" LinkedIn group.

Wednesday
Apr292015

A tale of two budgets: federal and provincial

In a tale of two budgets, the federal and provincial budgets were delivered last week. The federal budget is a pre-election document with something for everyone.  The provincial budget is one of a majority government with an eye to transportation infrastructure and getting the province fiscally on solid ground. 

Provincially  

Ontario Chamber of Commerce (OCC) policy analysts were in the budget lockup at Queen’s Park last Thursday and came away with the following analysis:

Provincial deficit has risen

Budget 2015 makes the right commitments but is vague on details when it comes to how the government will meet its deficit reduction targets (eliminating the deficit by 2017-2018).  Total provincial debt is projected to grow to $284 billion this year – equivalent to $20,772 of debt for every Ontarian.  The OCC applauds the government for making difficult decisions in terms of wage restraint measures and holding average annual growth in program spending to 1.5 percent.  This should be a top priority area for the government as eliminating the deficit is the most important step government can take to improve Ontario’s competitiveness and create jobs in the province.

Government is plowing ahead with the Ontario Retirement Pension Plan (ORPP)  

The OCC remains concerned about the impact that the ORPP could have on the economy.  Budget 2015 provides little in the way of clarity for employers on the details of the ORPP.  We continue to call on government to develop a comprehensive understanding of the impact of the ORPP and to re-examine the narrow exemption rules it has in place.  These narrow parameters ignore the contributions that many employers are already making to their employees’ retirement through defined-contribution plans.

Employers will continue to be shocked by rising electricity rates

Budget 2015 does little to address business’ concerns over rising electricity rates.  According, to the OCC’s most recent survey, rising electricity prices are the number one factor hurting business competitiveness.  While the Industrial Conservation Initiative (ICI) and the extension of the Northern Industrial Electricity Rate (NIER) program are encouraging, we remain very concerned about out-of-control electricity rates.  

Government is making important investments in transportation infrastructure

The OCC welcomes increased spending in areas of strategic, economic importance, including transportation infrastructure.  Budget 2015 increases dedicated transportation infrastructure funds by $2.6 billion to $31.5 billion available over 10 years.  These funds will be used for transit, transportation, and other priority infrastructure projects across Ontario. The Province should continue to make use of its world-leading Alternative Financing and Procurement (AFP) expertise in order to ensure it is getting the best bang for its infrastructure buck.

Government is aggressively pursuing an asset recycling strategy

The OCC supports the government’s goal to maximize the value of its assets. Budget 2015 increases the asset optimization target to $5.7 billion, up from a $2.6 billion target in 2014.  As it undertakes its asset review, government must ensure that its actions do not hurt domestic industry and, as it relates to the sale of electricity infrastructure, do not put the rate payer at risk. 

Innovation initiative:  The government is investing $20 million to establish a Health Technology Innovation Fund and appoint a Chief Innovation Strategist.

Cuts to the Apprenticeship Training Tax Credit: Funding is being returned to pre-recession levels, resulting in $30 million in cost savings. 

Youth Employment: Ontario Youth Jobs Strategy is being renewed to the tune of $250 million in the next two years. 

Full Provincial Budget 

Federally

“Oil prices have recovered slightly, to around $56, and we expect them to be back in the $65 range by year-end.  The government also enjoyed a $3.4 billion windfall from the sale of GM shares,” says Hendrik Brakel, Senior Director, Economic, Tax and Finance Policy, Canadian Chamber of Commerce.  “As a result, there is room for some helpful measures to support Canadian business, a few things that will make life easier for business.”

Taxes

Small Business Tax Rate will be reduced from 11 percent to 9 percent by 2019 (0.5 percent reduction each year starting January 1, 2016), resulting in $2.7 billion in tax savings through 2020.  

The federal government also committed to extending the accelerated capital cost allowance to 2025.  

On payroll taxes, the Canadian Chamber was pleased by the government reconfirming the EI premium rate freeze.  

Trade and International Affairs 

There was a significant increase in funding for agriculture exports, including $18 million to promote
competiveness and trade opportunities and $12 million to market Canadian food.  

Technology and Innovation

The federal government promised $1.3 billion over six years starting in 2017-18 to the Canada Foundation for Innovation for advanced research infrastructure at universities and research hospitals. 

As well as, $1 billion over five years for technical demonstrations in the aerospace industry plus $30 million over four years for Canada’s satellite communications sector.  

People and Skills

The investment of $65 million will allow business and industry trade associations to work with post-secondary institutions to better determine the needs of the market.

The Canadian Chamber has been advocating for improved labour market information, so it was pleased to see $4 million over two years to launch a new one-stop national labour market information portal.  We welcome this as a first step toward more investments in actual surveys.  

Missing from the federal budget were discussions around climate change.

Full Federal Budget

The business community is fighting for a business climate that functions at the utmost efficiency and look to the government at all levels to set the framework so that goal can be realized.   The economic health of our country and our province are key to moving us forward.  However, both budgets reflect a common tension that governments must balance through the best of times and the worst of times. 

Comment through the "Peterborough Chamber" group of LinkedIn.