Manufacturer coalition slams budget that only increases cost of government
Last week’s federal budget has drawn the ire of one manufacturing coalition, the Coalition of Concerned Manufacturers & Businesses Canada (CCMBC).
As anticipated, the federal budget was characterized by a number of areas of significant spending increases, which will continue to add to Canada’s debt, “while containing few if any measures to promote the kind of productive business growth that underpins the nation’s financial stability,” reads a statement from the CCMBC.
There was virtually nothing in the budget to enhance the growth of the small- and medium-sized business sector, which represents about half of the economy and the majority of new job creation, points out CCMBC President, Catherine Swift.
“Although the government boasts about a declining debt/GDP ratio, that is taking place as a result of inflation temporarily boosting revenues rather than as a result of healthy private sector growth,” says Swift. “It is ironic that a key driver of government revenue increases is the improved fortunes of the oil and gas industry and the increased taxes they pay to governments, considering that this is an industry the Liberals have consistently sought to knee-cap.”
Housing was a major focus of the budget, yet the measures proposed are unlikely to have much impact, she adds, admitting that an enhanced TFSA for housing purposes is a good idea in general, but in the near term will merely further boost demand which is already driving sky-high housing prices.
Budget measures to devote new funds to augment housing supply are minimal considering the magnitude of supply shortages and the record number of immigrants entering Canada, all of whom need housing.
“Measures to reduce the cost of doing business for homebuilders and cutting back on the excessive government spending that is in part driving inflation would be more effective that such token changes as a temporary ban on foreign housing purchases,” Swift says. “Young people seeking to purchase their first home will not be encouraged by this budget.”
The addition of further big spending programs in areas such as dental care and pharmacare will permanently expand the size and cost of government.
“It would be better to address the gaps in the current systems – gaps that are not that large – than create entire new expensive government bureaucracies that will ultimately disappoint Canadians just as our government monopoly health care system has,” says Swift.
Overall, the budget prioritizes many areas of new spending while neglecting the sector that will be expected to pay for all of this government largesse – the productive private business sector that provides the jobs and tax revenues that underpin government services. A recent comparison of economic growth forecasts among OECD countries found that Canada had one of the worst prospects for the coming decades.
This budget will do nothing to change this dismal outlook, says Swift.
The CCMBC was formed in 2016 with a mandate to advocate for proactive and innovative policies that are conducive to manufacturing and business retention and safeguarding job growth in Canada.