The Sault Ste. Marie Chamber of Commerce commends the Government of Canada for delivering a budget that is balanced while still finding room for worthwhile tax cuts for both Canadians and businesses. The Chamber questions the use of Employment Insurance surplus funds to make it happen, however.
Mark Barsanti, President of the Sault Ste. Marie Chamber of Commerce, notes that while “this is undoubtedly an ‘election year budget’ containing a little something for everyone, there are a number of business-friendly tax adjustments and some spending announcements that we were pleased to see included.”
The budget will allocate $5.8 billion over three years for new infrastructure, on top of the existing $5.3 billion from the Building Canada Plan. The quality of Canadian services and economic growth hinge on the availability of funds required to construct new, and renew existing infrastructure. Increasing the amount of funding allocated towards infrastructure spending solidifies the government’s commitment to invest in Canada. This commitment offers the business community an opportunity to diversify and expand.
The City of Sault Ste. Marie, the Chamber of Commerce and many other local agencies focused on economic development have advocated strongly in recent years for infrastructure investment that would assist in the development of the much-needed deep water port which would modernize and increase shipping capacity locally as well as for improvements to the Trans-Canada Highway. With funding becoming available, the Chamber will urge all stakeholders to re-double their efforts to secure funding for these types of projects.
The new budget will also allow small businesses more access to capital. Changes made to the Canada Small Business Financing Program will increase the maximum loan amount from $500,000 to $1 million Changes in qualifying criteria to apply for this financing will also mean that companies with a revenue of $10 million, up from $5 million, may now qualify.
The budget also allocates $14 million to support young entrepreneurs through a program called Futurpreneur. This program will support young entrepreneurship with start-up capital, learning tools and mentorship. The Sault Ste. Marie Chamber of Commerce maintains that supporting young business people and promoting entrepreneurship is critical to sustaining the Sault’s economy and promoting growth. Assisting in the development of young entrepreneurs will encourage them to explore innovative business ideas.
One of the key points for the business in this week’s budget is the 2% decrease in the small business tax rate. This reduction will result nationally in $2.7 billion in tax savings through year 2020. This tax cut represents the largest tax cut for small businesses in 25 years.
Barsanti notes that “introducing a tax reduction like this will leave more money in the hands of business owners and provide them an opportunity to invest in other aspects of their business and it’s an important step helping Canada become a more competitive place to do business.”
He cautions however that the business community will have to remain vigilant and work to ensure that other levels of government do not consume this tax cut through their own budgets.
One shortfall of Monday’s budget according to Barsanti is the failure to address overfunding of the Employment Insurance program. He notes that “the government continues the practice of overfunding the E.I. program through payroll premiums. The decision to continue the overfunding into 2017, will result in substantially less money in the hands of employers and workers that would stimulate the economy.”