How the Federal Budget Will Affect New Brunswick Business
FREDERICTON– Tuesday’s federal budget tabled by Liberal Finance Minister Bill Morneau is being studied and critiqued by local chambers of commerce to discover how exactly it will affect business in the province.
One notable exclusion from the budget is a planned reduction in small business tax.
“We are disappointed the small business tax was not reduced as planned along with a less-than-anticipated cut in employment insurance rates,” said Fredericton Chamber CEO Krista Ross. “These measures disproportionately affect small businesses which have seen their costs rise through a tough economy over the past decade.”
Fredericton Chamber also reacted to details laid out about the EI payroll tax, stating that the decrease from 1.88 to 1.61 is a positive measure but that the previously planned reduction to 1.49 would have been a better stimulus for potential business growth.
Krista Ross is optimistic that investments in skills training will work to address the province’s 9.9 per cent unemployment rate and 17.1 per cent youth unemployment rate.
“We are quite pleased to see further enhancements to skills training through the Canada Job Grant and labour market agreements, which has been a top priority for the Canadian Chamber of Commerce and local chambers across the country for several years,” Ross said.
Moncton Chamber of Commerce echoed disappointment over the lack of reduction in the corporate tax rate for small businesses, saying the federal government’s focus in this budget is on making life a little easier for middle income families but does not bring any immediate relief to small business.
“Some of the announcements we were expecting just weren’t made today, but there is hope as we await the second phase of the infrastructure plan,” said Moncton Chamber CEO Carol O’Reilly. “Average Canadians are definitely coming out ahead in this budget through including a large increase to student grants for middle to low income families and part time students.”
The Moncton Chamber is optimistic about the implementation of an innovation strategy, the investment in research and development in Canada’s post-secondary institution, the focus on skills and training and the support provided to innovation clusters and incubators.
The Atlantic Provinces Economic Council (APEC) explored budget details relevant to Atlantic Canada such as infrastructure; innovation and clean technology; employment insurance; training and youth employment; indigenous people; personal taxes; family and seniors’ benefits and business taxation.
A release from APEC pointed out the difference between the projected deficit of the 2016 budget and the small surplus forecast in last year’s budget:
“The new Liberal government is projecting deficits of $29 billion for the next two fiscal years, equivalent to 1.5 per cent of GDP in 2016/2017. This is in stark contrast to the small surpluses of about $2 billion forecast in last year’s budget and the Liberal platform plan for ‘a modest short-term deficit of less than $10 billion in each of the next two fiscal years.’ … While the government states that it is committed to balancing the budget, no time frame is provided,” the release read.
Local chambers of commerce are expected to continue to react to budget announcements as they are released over the coming weeks.