welcome the investment policy presented on Tuesday
but some have questioned whether Prime Minister Mark Carney's government has been aggressive enough and warned more needs to be done to enforce the measures.
.
“This was a transformational budget at a time when the country is truly in crisis,” said Goldie Hyder, president and CEO of the Foundation.
during the webinar
on Wednesday.
Ultimately, however, Haider said the federal budget was too cautious and that he hoped Carney's government would go further.
“I think the Canadian public gave them a social license to go further, faster and deeper, but they just didn’t take advantage of it.”
The budget was largely a response to the economic fallout from the trade war with the United States, which led to lower economic growth forecasts for Canada and an eight per cent drop in business investment in the second quarter of this year. To counter this downturn, Carney's government has pledged $500 billion in private investment over the next five years.
The new measures introduced include accelerated capital cost relief for low-carbon liquefied natural gas plants and immediate write-offs for manufacturing and processing buildings, a key demand of the manufacturing sector.
“I’ve been with CME for eight years, and this has been on our list for ten years,” said Dennis Darby, the company’s president and CEO.
Canadian manufacturers and exporters
. “It’s positive that they responded and we hope it stays that way forever.”
Darby added that he hopes the federal government will eventually introduce a tax break for the industry and begin tax due diligence.
“We need a comprehensive tax review to make sure we are competitive because we are in a fierce battle for capital,” he said.
The budget also included $115 billion for infrastructure and $25 billion for housing over the next five years.
“Canada has underinvested in critical infrastructure for decades,” said Rodrigue Gilbert, President
Canadian Construction Association
(CAA), in a statement. “These investments reflect the important role housing infrastructure plays in addressing the country’s housing shortage and the commitment of significant resources to these projects.”
The CCA would also eventually like to see a coordinated national workforce strategy aimed at addressing the industry's labor shortage by integrating immigration, apprenticeships and skills development, while eliminating the stigma associated with the skilled trades.
Tuesday's budget projected a deficit of $78.3 billion this year and the federal debt expected to reach $1.347 trillion in 2025-26.
The Carney government also promises to find $60 billion in operating savings over the next five years through a comprehensive spending review. This would include efficiency gains in government programs and the loss of 40,000 public service jobs from their peak in 2023-24.
“Execution will be critical,” said Bill Morneau, former Treasury secretary and corporate director
Canadian Imperial Bank of Commerce
during the webinar. “I’m glad they’re making a significant effort; we're not going back to the scale of the civil service when I left in 2020, we're going back to the period after that, so I think there's more work to be done in that area.”
The budget also highlights the previously announced “Buy Canada” federal procurement strategy, which was welcomed by the trade-struggled steel industry at a time when it still faces 50 percent industry tariffs from the United States.
Katherine Cobden, President and CEO
said the measure would open up opportunities for the industry but would like to see more effort from the federal government to protect the domestic steel market.
“We remain steadfast in our need to urgently return our domestic steel market share to 80-85 percent, as do our key trading partners the United States and the European Union,” she said in a statement. “To achieve this goal, we continue to urgently call for further measures at our border.”
The budget did signal a potential lifting of caps on oil and gas emissions, but promised to strengthen the industrial carbon pricing system.
The burden of federal regulation continues to deter investment, with Statistics Canada estimating that it has increased by 37 per cent between 2006 and 2021.
“I think there are still some regulatory requirements,” Hyder said. “It's not just about taxes, it's about regulations, and I say that with great respect. It's not just the federal government that determines these things, but our provincial governments have a role to play as well.”
Haider said only time will tell whether these measures are enough to make the economy more competitive.
“The measurement will be, ‘Is the capital deployed?’ because the question is not whether we have done enough against ourselves, but how we perform against the competition,” he added.
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