Today, Toronto Region Board of Trade President & CEO Giles Gherson issued the following statement in response to the Government of Canada’s Budget 2024 tabled by Finance Minister Chrystia Freeland:
While we support some measures tabled today by Minister Freeland, we also have big concerns with Budget 2024. Execution on the steps forward is being proposed at a pace that is simply too slow, while spending is increasing at a rate that would only be appropriate in the context of a relentless focus on investments in productivity. We’re in a race against competing jurisdictions who are running, while we seem content to walk.
The focus for the Government of Canada, now and in the years to come, must be on turning around the country’s faltering productivity which is mortgaging our future prosperity for all generations. We face a dramatic productivity gap in comparison with other OECD countries and, especially, comparable regions in the United States.
This is not sustainable. Canada must focus on building wealth. We must invest in new productive capacity to drive our economy forward now to bolster our stagnant standard of living. Given our significant population increase over the past many years, we continue to add people to capital, further splitting the pie, rather than adding capital to people, thereby growing the pie.
Steps Forward
We are pleased to see budget commitments supporting:
- New investment tax credits and fresh details on previous announcements, incentivizing urgently needed investment in several key industries in which Canada is positioned to be a global leader, including: EV manufacturing, the supply chain, and the broader climate economy, and targeted investments to grow Canada’s burgeoning artificial intelligence industry.
- Investments to support the development of critical infrastructure needed for new housing supply across Canada – a big step forward in addressing the housing affordability crisis that creates barriers to attracting and retaining talent.
- This represents a welcome shift from previous budgets, which subsidised individuals’ ability to pay, leading to higher prices rather than greater affordability.
- A $3.1 billion commitment to supporting Canadian Nuclear Laboratories’ ongoing nuclear science research, a critical step in ensuring the success of made-in-Canada nuclear technologies in preparation for a global resurgence in clean nuclear energy.
- Investments in the Canadian university research enterprise, reflecting that attracting high-calibre students can help power our workforce of the future and that research conducted at Canadian universities supports our long-term economic growth.
- Investments in Canada’s rail system, particularly in the planned high frequency rail corridor connecting Toronto, Ottawa and Montreal.
Areas of Concern
- We are concerned that this budget anticipates higher deficits than previously forecast for every year from now through 2028-29 and encourage the government to commit to an accelerated path to balance and avoid piling on to fiscal challenges that will saddle future generations.
- This is an unmistakably high-spend budget in the midst of an unmistakable economic growth crisis. While we understand the Government’s desire to improve affordability for Canadians, the best way to do so is to invest in productive capacity – a more productive economy would drive a sustainably improved standard of living, creating wealth for Canadians without having to borrow from the future to support short-term, band-aid solutions.
- This long list of high-cost commitments is being paid for in part by increasing the inclusion rate on capital gains of more than $250,000 – representing a new disincentive for investment and business growth.
- Toronto, the economic engine of Canada faces a universally accepted fiscal crisis that only collaboration between all three orders of government can address. We understand that “New Deal” negotiations are still underway with the City but remain disappointed to see the federal government making slow progress in contributing its fair share.
We have seen declining productivity in 16 of the last 17 quarters. This budget does too little to change course.
The Toronto Region Board of Trade is one of the largest and most influential business chambers in North America and is a catalyst for the region’s economic agenda. We pursue policy change to drive the growth and competitiveness of the Toronto region and facilitate market opportunities with programs, partnerships and connections to help our members succeed – domestically and internationally.
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