Motz blasts federal government’s fiscal update
A tax break for Canadian companies that invest in new machinery is one of few bright spots in a federal government fiscal update, according to local Member of Parliament Glen Motz, who adds that rising deficits in a strong economy are a clear signal of mismanagement.
“It’s left a lot to be desired,” Motz told the News on Friday of the update, tabled earlier this week in the he House of Commons.
It laid out $16 billion in initiatives, most from tax changes that are counted as lower revenue and would allow companies to write off machinery sooner. That’s coupled however, with analysis that the federal deficit will grow slightly and further push off a move toward balancing the federal budget.
For Motz, that means already larger than promised deficits are growing while economic competitiveness is being hurt on a number of fronts.
“(The tax change) would be great to see expanded, but the comments I’ve seen is that it’s too little too late, and the rest of it is an absolute disaster.
“Canada’s lost its competitiveness in all ways.”
That includes tax rates, carbon pricing and a lack of progress on export pipeline development, said Motz.
Conservatives had been calling on the Liberal government to respond to corporate tax cuts in the United States, which they said could dry up investment in this country.
The measure, which would allow companies to write off the full cost of new equipment immediately, is aimed at enticing companies to modernize while lowering the tax burden.
Federal Finance Minister Bill Morneau says the government is benefiting from “a very good situation — but we know that we have to consider investments in the future.
“That’s why we listened to and heard the anxieties of the business sector.”
That could result in $14 billion in lost tax revenue over five years. The projected deficit is now $18.1 billion this year, then rising to $19.6 billion next, before falling back to $18.1 billion in 2020-21.
This week, Premier Rachel Notley criticized the federal response to deepening price discounts for Alberta’s oil exports.
It earned little mention in Morneau’s statement to parliament, and later in week, Prime Minister Justin Trudeau was met by protests during a visit to Calgary and further criticism from business leaders.
Motz said the federal response is clearly lacking.
“There’s not one mention of the energy sector that drives the economy — how misguided can you be?” he said, adding the price differential on Alberta crude should be dealt with as a national crisis.
“It’s costing us a school a day and a hospital a week in this country, and that’s just the energy sector.”
Other initiatives in the update include money to support the salmon fishing industry and $600 million over a number of years to bolster stability in local media.