Policy Matters: Canadian Business Is an Integral Part of the Economic Solution

The federal budget sets the economic tone for the year — but before it’s released, Canadians have an opportunity to share their ideas on what should be prioritized in pre-budget consultations.

These consultations can be as simple as an individual answering a questionnaire or as in-depth as an organization sending a formal written submission. Pre-budget submissions are important because government needs to hear from stakeholders who have real-world experience in the day-to-day function of the economy.

Each year, the Canadian Chamber of Commerce, on behalf of our broader membership of 200,000 Canadian businesses, sends an in-depth submission to the government’s Standing Committee on Finance (which we did in August 2023), followed by a letter to the Minister of Finance (which we sent in February).

Submitting our recommendations is a chance to help ensure that the federal budget rightfully and meaningfully considers the needs of Canadian businesses by investing in long-term economic measures like infrastructure, cybersecurity, talent and innovation.

Economic Growth Driven by the Private Sector

Our vision is for Canadian businesses to be viewed by government as an integral part of the economic solution. After all, business success leads to economic prosperity, resulting in a better life for all Canadians.

Government stepping aside to allow the private sector to lead economic growth, instead of spending more money to create new programs, is particularly critical at a time when Canadians are struggling with unaffordable housing markets and the high cost of living. Many of the measures we included in our pre-budget submission, including regulatory reform and dismantling internal trade barriers, will cost the government little or nothing but will generate future prosperity and ease the burden on both businesses and Canadians.

We see Budget 2024 as an opportunity to attract the investment needed for strong, sustainable economic growth and a successful net-zero transition, while also fostering businesses of all sizes.

How can we get there?

In our letter to Deputy Prime Minister Chrystia Freeland, we put forward 17 policy recommendations under five larger themes. We’ve highlighted the major points from each theme below.

Ensure Reliable Supply Chains

Two-thirds of Canada’s gross domestic product (GDP) is based on trade activity, but successful trade requires reliable supply chains. However, as we learned in 2023, supply chains are only as strong as their weakest links.

Frequent floods and wildfires last year revealed the fragility of many of Canada’s supply chains. At the same time, key points in our trade corridors experienced repeated or prolonged strikes, putting further strain on the entire system and wracking up economic costs. The Government of Canada estimated that a full shutdown of the Port of Montreal during a 2023 strike cost the Canadian economy $100 million a week! Reliable infrastructure and supply chains will help alleviate some of the frustration Canadians are feeling about the affordability crisis since they’ll ensure that products move and prices are stable.

In our pre-budget submission, we recommend government:

• Commit to long-term investment through a Canada Trade Infrastructure Plan.
• Expand abilities to head-off preventable threats to supply chains, like recurring labour disruptions.

Ease the Burden of Doing Business

The right policy environment can help businesses succeed in today’s rapidly changing global landscape. Governments in the past have attempted to regulate our industries into being competitive, but this has had the opposite effect — investment is no longer incentivized, and entrepreneurs and owners experience extra hurdles and costs when trying to start or grow their businesses.

Government and businesses working together to modernize our regulatory system will foster an economy that values innovation and growth, while also retaining the next generation of entrepreneurs and talent and ensuring Canada remains an attractive destination for investment.

We recommend government:

• Accelerate regulatory modernization and include an economic and competitiveness lens when developing new regulations.
• Act to reduce interprovincial barriers to potentially increase GDP growth by up to 8%.
• Stop introducing new taxes. As Canadians and businesses across the country struggle with an increased cost of living, now is not the time to increase taxes.
• Develop targeted and strategic support for struggling small- and medium-sized enterprises.

Make Pragmatic Investments in Net-Zero

The economy and the environment should advance in lockstep. Our resource sector — natural gas and oil, hydro, mining, and forestry — can deliver low-emission energy and other products to meet global needs, while developing new clean technologies that deliver emission reduction. This is something to be proud of.

We recommend government:

• Develop a cohesive national energy strategy that recognizes the need for specific regional and provincial approaches.
• Facilitate the transition to net-zero through 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.
• 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. According to a 2023 report by Deloitte, Canada ranked first out of all G7 nations in artificial intelligence (AI) talent concentration, and we came second in number of AI patents filed. However, to maintain this competitive edge, we must capitalize on our advantages in AI, cybersecurity, and digital health.

We recommend government:

• Protect critical infrastructure, supply chains and businesses from cyber threats by investing in IT and operational technology security.
• Encourage value-added agricultural processing to help Canada meet global food demand.
• Continue to support a resilient and globally competitive life sciences sector by building on the biomanufacturing and life sciences strategy.
• Support and incentivize AI adoption and implementation in business operations and processes to improve the efficiency and productivity of Canadian businesses.
• Continue the greater democratization of data by renewing the Business Data Lab.

Attract, Develop and Retain Talent

The Canadian labour shortage, recruiting new employees and retaining skilled employees are among the top 10 business obstacles expected in the short-term according to the 2023 Q4 Canadian Survey on Business Conditions Report from the Business Data Lab. Canada needs a forward-looking national workforce strategy to attract, retain and develop a skilled and resilient workforce that is ready to respond to today’s labour needs and successfully navigate to the net-zero demands of the future.

We recommend government:

• Address workforce gaps through skills-based immigration programs that are aligned with regional labour needs.
• Enhance upskilling and reskilling programs and supports to meet labour market needs.
• Expedite foreign qualification recognition in priority sectors like agriculture, childcare, construction, healthcare and transportation.

Moving Forward

As we await the release of Budget 2024 on April 16, it is encouraging to see that many of our recommendations were reflected in the Standing Committee on Finance’s report, Shaping Our Economic Future: Canadian Priorities, that was tabled in the House of Commons on February 26.

The report makes public the committee’s findings and recommendations from the pre-budget consultations in advance of the 2024 budget.

Collaboration between government and the business community is more critical than ever. A successful partnership must be founded on the understanding that business as part of the economic solution will allow us to respond effectively to current economic challenges. The government’s response will determine whether we remain a reliable country for trade, investment and business and support a better life for all Canadians.