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Release: Opportunities for all Canadians depend on sustained economic growth
March 19, 2019 (Vancouver, B.C.) - While the Business Council of British Columbia applauds Minister Morneau and the federal government for a number of new initiatives announced in today’s budget, Canada continues to face fundamental challenges to its prosperity and competitiveness that require greater attention.
Despite a few years of modest economic growth, there are dark clouds on the horizon. Nationally, real GDP growth has stalled, and the country struggles to boost productivity and scale up more of our domestic companies.
“Canada is a small, open trading economy dependent upon foreign direct investment and the ability to move our exports to international markets efficiently,” said Greg D’Avignon, President and Chief Executive Officer, Business Council of British Columbia. “Unfortunately, Budget 2019 lacks the necessary actions to bolster Canada’s competitiveness or prepare the country for the imminent global economic slowdown.”
In the fall economic statement, government committed to getting a handle on the growing burden of regulation, recognizing the weight this is placing on Canada’s competitiveness. To date, little concrete action has been taken on this front. In recent years, the regulatory environment for Canadian companies and entrepreneurs has become increasingly costly and complex. According to the World Bank, Canada ranks 21st for ease of doing business, well behind countries like Denmark, Korea, the United States and Estonia. And in the latest World Economic Forum Competitiveness report, Canada ranks near the bottom among all advanced economies in the effectiveness and efficiency of its regulatory processes.
“The cumulative effect and uncertainty from increased regulations and widespread project delays from all levels of government are adding costs and diminishing Canada’s attractiveness as a place to invest and deploy capital,” added D’Avignon. “The new budget signals that the government recognizes these problems; but looking ahead, we believe that more must be done to modernize and streamline regulatory processes across key domains of federal jurisdiction that will benefit not only businesses and communities, but Canadian families’ financial well being.”
Canada is also overdue for a comprehensive review of taxation and its overall impact on the economy. The last in-dept review was the Carter Commission appointed by then Prime Minister Diefenbaker in 1962 – the same year current Finance Minister Morneau was born. The Business Council of British Columbia is urging the federal government to prepare Canada’s tax system for a rapidly changing digital economy by launching an independent, expert-driven review that will aim to equip the country with a modern, competitive and administratively efficient tax system that raises the revenues needed to pay for public services and income support programs.
Some bright spots in today’s budget include an increased focus on life-long learning and skills training, making permanent the Global Talent Stream, targeted investments in natural resource innovation and market diversification, a commitment to expand Canadians’ access to broadband services, and changes to the tax rules governing business research and development.
The Business Council of B.C. is particularly concerned with Canada’s weak export performance and its dwindling presence in global markets.
“In the 2018 fall update, the government committed to steps that would see an increase in exports over time. But this budget does little to advance the infrastructure investments needed to support that objective,” said Jock Finlayson, Executive Vice President and Chief Policy Officer, Business Council of British Columbia. “The data show that Canada is steadily losing ground in global export markets. Without efficient transportation corridors and an ability to develop new trade-enabling infrastructure in a timely manner, the government’s efforts to diversify and expand Canada’s trade are destined to fall short.”
About the Business Council of British Columbia