The federal budget hits the mark by slashing corporate taxes and chopping a manufacturing tariff, both measures which should provide an economic boost, says a local business leader.
In sticking to its plan to whittle the federal general corporate tax rate from 18 per cent to 15 per cent in 2012, the government has signalled its intention to keep Canada as an investment destination, said Scott McMurtrie, chairman of the Red Deer Chamber of Commerce’s finance and taxation policy committee.
“Looking at it, we’re probably going to have some of the lowest tax rates in the G20 for federal business tax rates. With that, it’s all it’s going to do is make us more competitive when it comes to attracting businesses to Canada,” said McMurtrie, who is Alberta Treasury Branch’s relationship manager.
Eliminating a manufacturing tariff — expected to save Canadian companies $300 million by 2015 — could also be a big plus for some local companies, and the oilpatch.
Other positive federal moves include freezing employment insurance rates for workers and employers and the extension of a work-sharing program, which should help save jobs.
“It looks like Canada is doing quite well in coming out of the recession. I think they have to balance getting spending under control and ensuring the economy doesn’t stall and we fall back into a recession. They’ve got a bit of a tough balancing act right now.”
Fred Scaife, executive director of the Red Deer Food Bank Society, took time Thursday to read through the budget sections that impact his clients.
There was not a lot new there to provide extra help for those struggling to get by, he said. However, there were some bright spots. Scaife was pleased to see the government recognize youth at risk with over $100 million in program funding.
A measure to leave more money in the hands of single parents with young children by allowing them to keep more of the $100 cheque they receive every month for each child under six will be helpful to some, although it won’t have an impact on the typical food bank client whose income is too low to be taxable.
The government also did well to provide more money programs encouraging seniors to volunteer in the community.
Red Deer MP Earl Dreeshen said the budget sets the stage for future deficit reduction while introducing measures, such as an increase in the personal tax exemption, to put more money in the pockets of Canadians.
“In personal income tax relief, there’s $3.2 billion there. That’s sort of an extension of our basic philosophy that money in the hands of Canadian families is the best of all stimulus.”
Some members of the financial community have questioned whether the government’s growth projections are too optimistic and the Conservatives have left little economic wiggle room.
Dreeshen said government number crunchers looked at the global economy, but also at the country’s strong growth to end last year to come up with realistic projections.
“We would be optimistic for the guys who think growth is going to be low and we would be pessimistic for those who think growth is going to be higher. So you just have to find the balance.”