Canadian Chamber of Commerce’s 2024 Pre-Budget Submission
Canadian Chamber of Commerce’s 2024 Pre-Budget Submission
On February 8, 2024, the Canadian Chamber of Commerce submitted a pre-budget proposal to the Deputy Prime Minister and Minister of Finance, the Honorable Chrystia Freeland.
On February 8, 2024, the Canadian Chamber of Commerce submitted a comprehensive pre-budget proposal to the Deputy Prime Minister and Minister of Finance, the Honorable Chrystia Freeland. With a firm focus on bolstering Canada’s competitiveness and fostering sustainable growth, the submission outlines key measures essential for driving economic prosperity.
The letter and full submission can be found below.
February 8, 2024
Hon. Chrystia Freeland, P.C., M.P.
Deputy Prime Minister and Minister of Finance
80 Wellington Street
Ottawa, Ontario K1A 0A3
Sent by Email: Chrystia.Freeland@fin.gc.ca
Dear Deputy Prime Minister:
Canada’s competitiveness is slipping. Our productivity continues to decline. This means Canadians are poorer overall, have fewer opportunities to pursue their personal goals, and have to pay more just to stay where they are. We must pursue growth if we are to maintain our standard of living and continue to provide the services Canadians require.
The Canadian Chamber continues to urge the Government of Canada to focus on growth driven by the private sector: many of the measures included in our submission, including regulatory reform and dismantling internal trade barriers, will cost little or nothing, but will generate future wealth and investment. Canada’s economy is also founded on small business, many of which face unique challenges: the time is now for a dedicated national strategy for SMEs. Budget 2024 is the opportunity to attract the investment needed for strong, sustainable growth, a successful net-zero transition, while fostering businesses of all sizes.
Geopolitical conditions have introduced insecurity, disrupted traditional trading relationships, and undermined the rule of law. While Canada is also exposed to this problem, we are unique among free societies in our potential to underwrite global economic security through our abundant natural resources. And though our international competitors currently outpace us, the opportunities for Canada are still in reach. An essential first step is for Canada to invest in our most important trade and security relationship as the U.S. enters a critical election cycle and the CUSMA deal is considered for renewal.
We need to show the world we can, quite literally, deliver the goods.
The Canadian Chamber of Commerce’s pre-budget submission has been shaped by our member councils and committees, on behalf of our broader membership of 200,000 businesses of every size, from all regions and economic sectors of Canada.
The Canadian Chamber of Commerce is eager to partner with government on the strategy that will allow us to respond to this moment. Given the headwinds we face, collaboration between policymakers and the business community is more critical than ever before.
Hon. Perrin Beatty, P.C., O.C.
President and Chief Executive Officer
Canadian Chamber of Commerce
Ensuring Reliable Supply Chains
The evolving role of transportation and logistics is critical to countries’ competitive success, but Canada’s supply chains remain only as strong as their weakest link. The challenges and costs presented by climate shocks such as frequent floods and wildfires have demonstrated how fragile many of our supply chain systems and structures are. And, in the context of a highly restive labour environment, key points in our trade corridors have experienced repeated or prolonged strikes, putting further strain on a precarious system and compromising our reputation as a reliable place to do business.
Increasingly, attention has turned to supply chain resiliency, on-shoring or near-shoring, and new data systems and infrastructure as critical factors to ensure trading nations like Canada remain competitive and relevant. Canadians are frustrated by the affordability crisis and want to see elected officials work with business to ensure products move and prices are stable while our economy is growing.
- Commit to long-term investment through a Canada Trade Infrastructure Plan. Canada must build and maintain trade infrastructure that dependably and efficiently transports goods to and from market. Domestic and international trade corridors should solidify supply chains to establish Canada as a reliable business partner.
- Expand abilities to head off preventable threats to supply chains. Recurring labour disruptions continue to inflict damage to Canada’s economy and reputation. Government should consider providing new dispute resolution tools, including the authority for the federal cabinet to compel binding arbitration for the resolution of a labour dispute in sectors that are essential to Canada’s supply chains, including railways and ports. The Government should withdraw its Anti-Replacement Worker legislation as it will only raise costs on Canadians and businesses and further undermine our trading relationships.
Ease the Burden of Doing Business
As the pace of change facing Canadian businesses accelerates, companies must be agile and adapt to remain competitive. The right policy environment can help businesses succeed in this rapidly changing context and generate long-term economic growth. Making Canada an attractive destination for business investment that supports economic growth requires getting the fundamentals right.
At a time when inflation is persistent, government and the private sector must look at new ways to make Canada more competitive. Governments in the past have attempted to regulate our industries into a more competitive frame, but this has had the opposite effect as the costs of starting and growing a business act as disincentives to investment. To avoid losing the next generation of talent and innovation to competing nations, government and businesses must work together to foster an economy that values innovation, new entrants, and growth.
- Accelerate regulatory modernization. Regulators do not give sufficient consideration to economic impacts on business when making decisions. Acting to modernize our regulatory framework can improve environmental, social, and economic protections while increasing investment, growth, and jobs. An economic and competitiveness lens for federal regulators would encourage manageable regulations that support economic growth and our global competitiveness.
- Act to reduce interprovincial trade barriers. While significant efforts have bolstered global trade, internal barriers continue to impede interprovincial commerce. Streamlining internal trade stands as a pivotal catalyst, potentially elevating GDP growth by up to 8% and fortifying Canada’s economic foundation. While the Government of Canada has made progress, we need federal leadership to ensure significant steps are taken to reduce internal trade barriers.
- No new taxes. As Canadians and businesses from coast-to-coast-to-coast struggle with an increased cost of living, now is not the time to increase taxes on Canadians or businesses. To ensure Canada remains competitive, the Government should launch a comprehensive independent review of the tax system to ensure it is simpler and fairer. We cannot move alone on imposing a Digital Services Tax, nor can we introduce a retroactive tax: this will have a chilling effect on Canada’s investment climate. Similarly, continuing to raise the Excise Tax by 5% will negatively impact Canadian consumers and businesses throughout the beer, wine, and spirits value chain, including for farmers, producers, retailers, and restaurateurs.
- Ensure appropriate scope for National Pharmacare. Build on, rather than displace, the important role played by private players and employers, while respecting the jurisdiction of provinces and territories. We must follow the path of fiscal prudence.
- Targeted support for struggling SMEs. CEBA was a highly successful program that helped save countless small businesses during the pandemic. However, many local businesses still need time to get back on their feet as they face the pressures from high interest rates and skills shortages. Government needs a more tailored, strategic and innovative way to supporting small business in Canada.
Pragmatic Investment in Net-Zero
Canada’s resource sector – natural gas and oil, hydro, mining, forestry – can deliver low-emission energy and other products to meet global needs, while developing new clean technologies that can deliver emission reduction in Canada and abroad. Canadians can and should be proud of our natural resources. We recognize and welcome the Government’s strong commitment to fighting climate change.
How we get to net zero matters to ensure Canada’s pathway is competitive, enhances investment, creates jobs for Canadians and promotes innovation. Investments that support business-led transitions, offset market development, and foster a predictable business environment are crucial to meeting these goals. Canada’s business community is eager to lead the development of the net-zero framework to enable the greatest economic opportunity for the next generation.
- Regional approaches to net-zero. Developing a cohesive energy strategy that recognizes regional and provincial differences, focuses on leveraging domestic energy resources, and upholds global leadership in clean energy innovation.
- Facilitate the transition to net-zero. Canada needs to make convincing commitments to carbon capture and storage projects, carbon contracts for difference, and long-term major infrastructure projects that will allow us to decarbonize our energy sector. Business cannot do this without incentives and direct partnerships between government and industry. Our failure to do so will have profound consequences for the Canadian economy.
- Economic reconciliation. We need Government to incentivize partnerships with Indigenous communities that advance decarbonization projects and support economic reconciliation.
Enable an Innovative Economy
Canadian businesses are well-placed to lead in high-growth sectors, but to maintain this competitive edge, we must capitalize on our advantages in Artificial Intelligence (AI), cybersecurity, and digital health.
- Protect critical infrastructure, supply chains and businesses from cyber threats. Investment in IT and operational technology security will help critical infrastructure operators of all sizes develop and deploy prevention-first cybersecurity strategies. Government should consider redirecting funding from low uptake programs to help SMEs improve their cyber resilience and cybersecurity posture to close the investment gap.
- Encourage value-added agricultural processing. Increased capital investment in agricultural processing would help Canada meet global food demand while promoting value-added economic activity in commodities bound for export.
- Technology adoption for increased efficiencies. We encourage government to support and incentivize AI adoption and implementation in business operations and processes to improve the efficiency and productivity of Canadian businesses. This technology should be adopted within the public service and federally regulated sectors to streamline services and operations.
- Democratization of data through Business Data Lab renewal. With funding set to expire in March 2024, this extension would preserve valuable business data assets while maintaining and expanding the impressive suite of innovative BDL outputs and real-time data made freely available to Canadian businesses, municipalities, academic researchers, and community groups.
Attract, Develop and Retain Talent
Attracting and retaining critical talent while increasing productivity is vital to Canadian businesses. However, many sectors struggle to find and retain the talent needed to grow. Canada needs a forward-looking National Workforce Strategy to attract, retain and develop a skilled and resilient workforce ready to respond to today’s labour needs and successfully navigate the transition to the skills demands of the future.
- Skills-based immigration programs aligned with regional labour needs. These can be leveraged to address gaps in the workforce and should be complemented by supports addressing barriers to hiring highly skilled foreign talent. Specific attention is needed to ensure that Canada’s SME employers have support to access skilled labour.
- Enhanced upskilling and reskilling to meet labour market needs. We need the Government to investing in sector specific upskilling and reskilling programs to support the development of the Canadian workforce.
- Expedite foreign qualification recognition. Accelerated progress on mutual recognition across Canada is needed for qualified newcomers to Canada to be able to fully contribute to the Canadian economy. Priority sectors include agriculture, childcare, construction, healthcare, and transportation – all of which are critical to growing our economy.