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Dan Rogers
The Kelowna Chamber of Commerce says “there’s nothing to celebrate” in the federal government’s 2018-2019 budget.
Executive director Dan Rogers gave the assessment at a Chamber breakfast this morning, where he and tax experts from MNP broke down what the newly released budget will mean for local businesses.
Rogers echoed arguments from the Canadian Chamber of Commerce that the new budget contains some positive measures but “doesn’t address the most basic issues facing our economy.”
Rogers pointed to measures like better parental leave and an apprenticeship grant for women that aim to bring more women into the workforce, measures he called “no-brainers” that will help keep the country competitive.
He also gave a nod to the billions of dollars set aside for an Aboriginal skills development program.
“We need to do this to be competitive [and manage] our workforce challenges in the long run. It’s not just gender equality, it’s about integrating foreign workers, it’s about being flexible to address our long-term labour force needs,” he said.
Any end to deficits?
Rogers also said the Chamber is “concerned” with the projected $18 billion deficit laid out in the government’s financial plan, along with the fact there doesn’t appear to be a path back to balanced budgets.
He said the chamber is also disappointed the government didn’t do better addressing the areas in which the Canadian Chamber of Commerce wanted to see an improvement: competitiveness, private sector investment, and a path to a balanced budget.
“I won’t say that the federal government struck out on those, but there was nothing that we will celebrate in the budget,” Rogers said. “We saw an opportunity for improvements in these areas, but they just didn’t materialize within the budget.”
Corporate tax’s impact
Perhaps most relevant to the Okanagan business community are the changes the government has planned to some of its previously proposed corporate tax changes.
Finance Minister Bill Morneau first proposed the corporate tax changes last July. Shortly after the proposed laws were announced the Kelowna chamber joined a chorus of business interests across the country denouncing them.
Chamber president Tom Dyas said the changes would disproportionately affect small businesses, a particularly bad thing in Kelowna “where the majority of our businesses, well in excess of 75 per cent, have one to three employees.”
A chamber survey at the time found that more than 80 per cent of Okanagan business owners felt the changes would affect their business.
Rogers pointed out the budget reflects the fact that the government has “backed off” on many of its proposed changes.
‘Welcome news’
Marty Clement, a tax expert at MNP, said many of the updated rules will be “welcome news” to local business owners.
“The changes that were proposed were really sort of big band-aids that were applied to a system that’s already very, very complicated and convoluted,” he said.
He explained the new rules for taxing small business’ passive income are simpler than previously proposed and will dampen negative impacts on savings and investment for most small business owners (MNP’s more in-depth look at the changes is available here).
“We’ve got simplified tax on split income rules, a simplified approach to the investment income, and nothing concerning with capital gains and income. So a lot of headway was made from July to now,” Clement said.
He added that, despite some early concern, it appears corporations will still be “a pretty decent” vehicle for savings and investing, something that should be “a big relief” for many local professionals.
Rogers added that if Canada and the Okanagan are going to thrive the federal government will need to “get into a comprehensive review, engage the business community and develop a modern tax system that keeps us competitive for years to come.”
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