How the Minister of Finance can fuel growth
After over a year-and-a-half of lockdowns and sacrifice, Canadians are seeing the benefits of their efforts to stop COVID-19. The pandemic is not over, but we can now look beyond COVID to plan for our future. Now, the Canadian Chamber of Commerce is writing “mandate letters” to members of the Cabinet with policy priorities that will support growth of the Canadian economy.
Stewarding our country’s finances is the core task of the federal government. This includes ensuring we have sustainable public finances and a competitive tax system. The government also has a critical role in providing targeted supports to companies to generate the economic activity that will lead to long-term growth.
The Minister of Finance should:
- Work with the Minister for Tourism and Minister of Small Business to create a replacement program for the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy programs through to Spring 2022 that focuses on the hardest hit sectors (tourism, travel, hospitality) at the 75% support rate.
- Work with the Minister for Tourism and Minister of Small Business to extend the Canada Recovery Hiring Program to March 31, 2022 to ensure businesses have access to funds as they recover and begin to increase staffing capacities.
- Work with the Minister for Tourism and Minister of Small Business to introduce debt relief by extending repayment terms and forgiving interest payments on COVID-related government backed loans for SMEs in the hardest-hit sectors. This measure should apply to the Canada Emergency Business Account (CEBA), the Business Credit Availability Program (BCAP) and the Highly Affected Sectors Credit Availability Program (HASCAP).
- Work with the Minister of Innovation, Science and Industry to expand the definition of SR&ED to better reflect current industry innovation.
- Return Canada to pre-pandemic deficit-to-GDP ratio level within five years.
- Given the global tax regime changes being discussed by the G20, undertake a comprehensive and independent review of the tax system to ensure the Canada remains globally competitive and attractive for investment.
- Establish a Tax Working Group to provide a structured mechanism to resolve tax issues, similar to the intergenerational transfer of small businesses, at an earlier stage with the business and tax practitioner community.
- Preserve the spirit and intent of Bill C-208 when enacted provisions are repealed and replaced.
- Increase the revenue threshold for GST/HST registration to support small business creation and promote the commercialization of Canadian innovation.
- Increase the lifetime capital gains exemption limit on qualified small business corporate shares.
- Remove tax barriers for childcare expenses. Make childcare an eligible business expense for SMEs, remove the requirement for the lower-income spouse to receive the childcare deduction, and permit SME owners receiving non-eligible dividend income to claim childcare expenses against that income.
- Work with small businesses to simplify tax on split income rules and requirements for the taxation of dividend income.
- Create an Investment Tax Credit to compete with the United States on tax credits and deductions for capital investments. This will mobilize private capital, spur business investment and create growth.
- Extend the temporary accelerated capital cost allowance (CCA) deductions announced in Budget 2021 to publicly traded firms to align with the standard CCA system.
- Recalculate Canada’s marginal effective tax rate to reflect important tax changes announced since 2019 to monitor Canada’s tax competitiveness.
- Pursue a multilateral, consensus-based solution on Base Erosion and Profit Sharing (BEPS) and do not introduce a unilateral DST.
- Resist introducing new uncompetitive taxes on businesses, to avoid sending the wrong message to the broader business community.
To see all 21 of our mandate letters to ministers, click here.