RELEASE: Budget 2017 Offers Opportunities for Innovation, But BCBC Cautious on Canada's Overall Competitiveness
March 22, 2017 (Vancouver, BC) - Today’s federal budget, delivered at a time of significant global uncertainty, abrupt shifts in markets, and accelerating technological change, offers new opportunities for innovation and emerging sectors. However, the Business Council of British Columbia remains cautious on the implications of the continued federal deficit and questions whether enough is being done to strengthen Canada’s competitiveness.
"Budget 2017 announces several measures and actions to spur and leverage innovation and build a skilled Canadian workforce for the 21st century," stated Greg D'Avignon, President and CEO of the Business Council. We support the government’s focus on innovation and skills, along with the commitment to move forward with historic investments in mobility and trade-enabling infrastructure.”
The Business Council looks forward to additional details and more information on the mandate and structure of the proposed Infrastructure Bank later this year. As we have noted in the past, today’s era of low interest rates creates an opportunity for focused spending on infrastructure that will drive economic growth and development.
The new Budget envisages sizable operating deficits, in excess of $20 billion, over the next five years with the potential to impede Canada’s competitive advantage of fiscal stability. “We are concerned that the government has no plan to return to a balanced operating budget, even with the assumption of steady economic growth through 2022. This raises the prospect that a future economic downturn could lead to a sharp escalation of the deficit, putting at risk Canada’s triple-A credit rating,” noted Jock Finlayson, the Business Council’s Executive Vice President and Chief Policy Officer.
Budget 2017 proposes to make “big bets” on growth opportunities in a handful of key industry sectors, including agri-food, health/bio-sciences, clean technology, and digital technologies. The government will spend almost $1 billion over five years, to be allocated on a competitive basis to industry-led proposals to develop a small number of “super-clusters.”
commented: “We believe this approach to supporting innovation and industrial growth holds promise, provided it supports excellence and is focused on making Canada more competitive. We look forward to working with our partners in the BC business and academic communities to ensure that our province is positioned to grow our innovation ecosystem and leverage global opportunities, including the Cascadia Corridor
While the economic landscape for Canadian business is shifting in important ways, Budget 2017 gives little attention to creating a more competitive environment for entrepreneurship and business growth in Canada. “The hard truth is that Canada is losing ground, globally and in North America, as a location for high-value business activity,” observed Mr. Finlayson. “With emerging policy frameworks in the United States to lower and reform taxes, streamline regulations, reduce energy costs, and attract new manufacturing investment, there is a risk that Canada will continue to fall behind the US and other peer jurisdictions. Unfortunately, we see little in Budget 2017 that will help to address this fundamental challenge.”
The Business Council encourages the federal government to remain nimble and prepared to act quickly in the event of significant change in the tax and trade policies of the United States, our largest trading partner and main competitor for capital and talent.
Several measures announced in today’s budget align with policy priorities identified by the Business Council’s recent report, BC2035: A Vision for Economic Growth and Prosperity
. Increased resources for expanded child care spaces, supporting opportunities for STEM related education and advancing innovation at the local level by promoting “smart cities” will improve participation in the economy and support prosperity in communities across the country.
Visit www.BCBC.com in the coming days for the Business Council's full analysis of Budget 2017.
About the Business Council of British Columbia
Now in its 51st year as the premier business organization in British Columbia, the Business Council of BC is a non-partisan organization made up of 250 leading companies, post-secondary institutions and organizations from across BC's diverse economy. The Council produces exceptional public policy research and advocacy in support of creating a competitive economy for the benefit of all British Columbians.