Business groups are offering muted praise for the Liberal’s first budget, which outlined plans for more spending and running big deficits for the next five years, but didn’t raise business taxes.
The budget matched much of what the government had been communicating over the five months since they took office, said Iain Black, president and CEO of the Greater Vancouver Board of Trade(GVBOT). His organization gave the budget a grade of ‘B.’
“That’s one of the reasons why we’ve given this more favourable treatment,” Black said. “There wasn’t a lot of surprises. The government said they were going to spend money and they certainly did.”
Black said his organization was pleased to see government investments in infrastructure, but his organization would have liked to have seen a commitment to invest in the Pacific Gateway port and roads infrastructure. Infrastructure spending in the budget focuses heavily on transit, community services, wastewater treatment and climate change adaptation.
Dan Baxter, director of policy development for the BC Chamber of Commerce, said his organization is disappointed to see no mention of trade-focused infrastructure spending on ports and roads.
“Overall we were pleased to see a strong emphasis on infrastructure investment, but it was that lack of clarity around trade-enabling infrastructure,” Baxter said.
The Liberals had promised to lower the small business tax rate from 10.5% to 9% over three years, but have frozen the rate at 10.5%. That was a disappointment to the BC Chamber of Commerce and the Canadian Federation of Small Business. But Black said his members were relieved to see the rate not go up and other business taxes remain unchanged.
Baxter praised a $125 million commitment to labour market development agreements, $50 million for the Canada Job Fund, the continuation of the mining exploration tax credit and $50 million to Destination Canada to market tourism.
The BC Chamber of Commerce also warned about the size of the federal deficit, which will be $29 billion this year and continue to be large for the next five years. The Liberals campaigned on a promise to run $10 billion deficits every year for the next five years, but a slowing economy has reduced government revenues.
“To see a budget deficit approaching $30 billion is definitely concerning for us,” Baxter said, “and that there’s not a clear plan to get it back down to balance over the medium term.”