■ Tax breaks, small surplus praised by business
Businesses back federal budget
Business groups, especially those representing small business owners, were tickled pink with the 2015-16 federal budget, especially the reduction in the small business tax rate, increased lifetime capital gains exemption, small business job credit and accelerated tax breaks for manufacturers.
But one opposition politician was seeing red, arguing the budget is based on questionable economic assumptions, with little or no margin for fiscal surprises, and containing recycled, politically targeted tax breaks and spending programs that don’t kick in for two years or more.
The Canadian Federation of Independent Business (CFIB) gave the budget two thumbs up. “It’s a pretty terrific budget for small business,” said Marilyn Braun, CFIB’s vice-president for Prairie and agribusiness.
Specifically, the CFIB praised the budget for: reducing the small business corporate tax from 11 to nine per cent over the next four years, saving small firms $2.7 billion over four years; increasing the lifetime capital gains exemption for farmers and fishers to $1 million; accelerating the capital cost allowance for manufacturers for the next 10 years and saving small firms $550 million in lower Employment Insurance rates through the Small Business Job Credit.
Steve McLellan, CEO of the Saskatchewan Chamber of Commerce, added the budget contains “more good than bad, but more tomorrow than today.”
However, deputy Liberal leader and Wascana MP Ralph Goodale noted the forecast $1.4-billion surplus was achieved by selling GM shares for $2.1 billion and reducing the contingency fund to $1 billion from $3 billion for the next five years.
“The promised surplus is a razor-thin $1.4 billon — that’s a rounding error on a $300-billion budget,’’ said Goodale, who served as finance minister in the Paul Martin Liberal government. “There’s no prudence factor and there’s a small contingency reserve. In effect, they’ve used two-thirds of the contingency reserve and also used $2 billion from the sale of assets (to balance the budget).”
Goodale also criticized the budget for increasing the Tax Free Savings Account limit to $10,000 from $5,500 and providing income-splitting for families with incomes of up to $233,000. “The bottom line, the budget ends up giving the most to those who need it the least.”
Provincial finance Minister Ken Krawetz said his federal counterpart Joe Oliver’s first budget did “some of the things that we wanted to do, which was control spending and ensure that you move toward a balanced budget, and (he) has delivered that.”
But Krawetz told reporters “the area that really jumps out at us here in Saskatchewan is infrastructure,” referring to the province’s share of $436.7 million over 10 years from the Building Canada Fund, which was confirmed in the budget.
“We thought we’d be getting more, but that’s what we have to work with and we’re going to ensure that we continue with our infrastructure development.”
Regina Mayor Michael Fougere said the budget announcement likely to have the biggest effect on municipalities is $750 million for public transit infrastructure, which begins in 2017 and is spread over two years, with an additional $1 billion per year after that.
But the announcement comes with “many questions to be answered,” such as whether the public-private partnership (P3) focused funding will be applicable to Regina, what the criteria will be and when that money might actually start flowing, said Fougere..
“I wanted to see — I think it’s fair to say for all municipalities — a focus or release of funding now for transit for this year, more money for infrastructure,” Fougere said. “The fact that it’s pushed back a couple years means that that work we need to get done is not going to get done as fast as it should.”
Regina and District Chamber of Commerce CEO John Hopkins said he would like to see a national infrastructure plan, specifically for transportation improvements.
As chair of the Regina Trades and Skills Centre, Hopkins was pleased to see a handful of announcements geared toward job training, like $65 million to business and industry associations to help them align post-secondary curricula with job needs.
For Hopkins, the greatest success of the budget is that it’s balanced. “At least we’re at the point where it starts to tip the balance in terms of our finances for the country.”