Our Success = Your Gain
We, along with our network of over 450 chambers of commerce and boards of trade, are focused on breaking down the barriers to competitiveness to ensure Canadian businesses can prosper, compete and succeed. Our efforts are paying off. Here are some of our most recent advocacy successes:
Reinstating the federal income tax credit for labour-sponsored funds
On January 15, 2016, the Hon. Bill Morneau, Minister of Finance, confirmed that the federal government would reinstate the tax credit for labour-sponsored funds to “support economic growth and help Canadians save for their retirement.” The Canadian Chamber supports this decision as Canada’s competitiveness depends on the ability of its companies to access growth capital. Labour-sponsored funds are an important source of capital for entrepreneurs, especially in Quebec. They support the start-up and development of innovative businesses and the creation of well-paying jobs.
Restoring the Mandatory Long-form Census
On November 5, 2015, the Hon. Navdeep Bains, Minister of Innovation, Science and Development, announced that the government is restoring the mandatory long-form census for the 2016 census. Minister Bains said the government reinstated the long-form census because it is committed to creating and implementing sound, evidence-based policies built on quality data. The previous government cancelled the mandatory long-form census prior to the last census (2011). The Canadian Chamber and others called upon the government to reverse this decision because long-form census data are used by businesses, provinces/territories, municipalities and municipal researchers, among others, to monitor change in social, economic and other (e.g., transportation) indicators that inform policies, programs and business plans. The return to the mandatory long-form census is good news for Canadian businesses because access to accurate, representative and directly comparable data is an invaluable planning tool.
Canada and Its Partners Reach Agreement on Trans-Pacific Partnership
The Trans-Pacific Partnership (TPP) is the largest free trade agreement of the last 20 years. It will give Canada preferential access to an economic zone covering 800 million people and 40% of the global economy. Already, TPP countries account for the vast majority of Canadian exports and cross-border investment.
The partnership will be beneficial to Canadian farmers, food processors, and companies in forestry, mining, aerospace, financial services and information technology, among other industries. The TPP goes further than most trade agreements by including provisions to protect intellectual property rights and investments.
Key highlights for business include:
- Immediate elimination of import duties on the majority of Canadian exports to TPP markets;Access to new markets like Japan, Vietnam, Malaysia, Singapore, where Canada currently does not have trade agreements
- The potential for high-growth countries like China, Indonesia and the Philippines to join TPP in the future;New disciplines on state-owned enterprises to make sure that Canadian companies can compete on a level playing field
- Ecommerce rules that will nurture the growth of cloud computing and other data technologies essential to Canadian business competitiveness
- Provisions that will make it easier for Canadian services companies to get their people in and out of foreign markets
- Tools to help small businesses take advantage of the agreement and manage their supply chains
- Enhanced protections for investment and intellectual property so Canadian companies have the confidence to expand their presence and license products across the Pacific
More Flexibility in the Ontario Retirement Pension Plan (ORPP)
On August 11, 2015, the Government of Ontario announced more details regarding the ORPP. The Canadian Chamber and its members still believe the ORPP is an unnecessary additional payroll tax which does not recognize the benefits of private voluntary retirement savings vehicles, many of which are attached to tax incentives. The Ontario government did acknowledge our concern regarding the impact on the province’s smallest businesses – outlined in our presentation to them earlier this year - and will roll out the ORPP over three years beginning in 2017 with businesses with 500 employees. Businesses with 50-499 employees will follow in 2018 with the smallest businesses (50 employees) following in 2019.
The Canadian Chamber had also proposed that the Ontario government broaden the definition of “comparable” pension plans beyond Defined Benefit and Target Benefit Multi-Employer Pension Plans to include Defined Contribution (DC) plans and group RRSPs which many businesses have in place according to their financial and administrative resources. Businesses with “comparable” pension and/or retirement savings plans would be exempt from the ORPP. The Canadian Chamber achieved a partial victory as the Ontario government did broaden its definition of “comparable” pension plan to include DC plans where the contribution is at least 8 % and the employer contribution is minimum of 50 %. This means that more Ontario employers will not have to implement the ORPP.
Better Labour Market Information
Which jobs are employers having the most difficulty filling and where are they? The Job Vacancy and Wage Survey (JVWS) answers that question and others with data for 76 economic regions and across as many as 500 occupations per region. It is a quarterly and distinct complement to the existing monthly Job Vacancy Survey, which is a lead indicator of vacant jobs, i.e., what are the trends and which industries seem to be improving or worsening. The Canadian Chamber welcomes the investment of $8 million a year for the new job vacancy survey, as the JVWS is the single most significant addition to national Labour Market Information (LMI) in the past several years. Addressing one of the key gaps cited in the Canadian Chamber’s recent LMI report card, it’s a move to be applauded and repeated elsewhere in the LMI portfolio by the next government.
Agreement on Internal Trade
Canada’s provincial, territorial and federal trade ministers announced that they are committed to renegotiating an internal trade deal by March 2016. We welcomed the announcement with enthusiasm as we have been pushing for the dismantling of internal trade barriers for years; this issue has also been part of our list of the Top 10 Barriers to Competitiveness since 2013. Reducing internal barriers is necessary to reduce costs on business and encourage business activity in Canada. This new agreement is the first step towards breaking down a significant barrier, leading to a more competitive and prosperous Canada.
Voluntary CPP Contributions
The announcement by the federal government that it intends to allow Canadians to voluntarily make additional contributions to the Canada Pension Plan (CPP) promises good news for Canadians and their employers. We have long supported providing employers and employees with retirement savings options that recognize their varying resources and needs without imposing additional burdens – in the form of higher payroll taxes – on businesses. This is why we have advocated that any enhancements to the CPP be voluntary and paid for by employees only. Increased contributions by employers – as proposed under the Ontario Retirement Pension Plan – can result in businesses curtailing the hiring of new employees and harm the other voluntary retirement savings programs that serve Canadians well. Subject to the outcome of the consultations the government has announced, we are optimistic that the government’s proposal will give Canadians another choice in increasing their savings for retirement.
Federal Budget 2015
We salute the fact that the government presented a balanced budget and we welcome the renewed investments in infrastructure, initiatives to improve Canada’s skilled workforce and initiatives to improve access to capital, three measures we have been actively advocating in the last year. The creation of a national Development Finance Initiative, which will help convert impoverished countries into business partners, is also a long-standing recommendation of ours. Consult our Budget Analysis for an overview of the measures announced in the 2015 federal budget that are of benefit to business.
Canada Launches Renminbi Trading Hub
We applaud the launch of the first trading hub for China's currency in the Americas. This is a win for Canadian business because it lowers the cost of doing business with China and will be a significant boost to trade. We estimate the hub could increase Canada’s exports to China by as much as $32 billion over the next decade, while cutting Canadian importers’ costs by as much as $2.75 billion. Many Chinese companies prefer doing business in renminbi and are willing to offer buyer discounts. Businesses can also save on foreign exchange costs by converting directly from Canadian dollars to renminbi, without the intermediary step of converting into U.S. Dollars. In November 2014, we issued a report on why Canada needs a renminbi trading hub.
New Export Market Development Program and Expansion of the Trade Commissioner Service
The federal government announced that it will establish a new export market development program and expand the Trade Commissioner Service. The export market development program will receive $50 million over five years to provide non-repayable matching contributions to companies seeking to export to emerging markets for the first time. The program aims to reach 500-1000 exporters per year and will cover market research and participation in trade fairs and business development trips. The Trade Commissioner Service, which maintains a network of trade promotion officers around the world, will receive $42 million over five years and an additional $9.25 million per year afterwards. This funding will be used to increase their footprint abroad and increase promotion and outreach efforts in Canada. Last year, our Turning It Around report called for Ottawa to maximize the value of free trade agreements by enhancing trade promotion and economic diplomacy, including new tools for exporters and additional resources for the Trade Commissioner Service. A subsequent report on discussions with fast-growing entrepreneurs across Canada confirmed the need to raise awareness of government trade promotion services.
Agreement on Land, Rail, Marine and Air Transport Preclearance between the Government of Canada and the Government of the United States of America
We welcome the signing of a preclearance agreement between Canada and the United States. Such an agreement has long been promised and was one of the commitments made in the 2011 Beyond the Borders Agreement. We have long called for such an agreement and believe that new preclearance operations will greatly improve the competitiveness of North American trade. The agreement will allow both CBSA and U.S. CBP officers to conduct preclearance operations in each other’s territory. A similar agreement has been in place at a number of Canadian airports for several years and has been a massive success. Such preclearance operations greatly reduce congestion at the border and allow for streamlined processing of trusted trade and travel. We will continue to work with authorities on both sides of the border to ensure the efficient rollout of this initiative.
Mineral Exploration Tax Credit
The federal government announced that it has extended the 15% Mineral Exploration Tax Credit (METC) for investors in flow-through shares for an additional year until March 31, 2016. The METC is a measure designed to assist junior mining companies in raising new equity through flow-through shares. This additional financing should help exploration companies maintain or increase the amount of exploration activity in Canada. The government also announced that costs associated with environmental studies and community consultations are eligible for treatment as Canadian Exploration Expenses and could qualify for the METC. We reiterated our call for both these measures in our Mining Capital report, which we released in 2013.
Implementation of the Person-to-government Dispute Resolution Mechansim in the AIT
On Feb. 18, 2015 the implementation of the person-to-government dispute resolution mechanism in the Agreement on Internal Trade came into force. We have been calling for improvements to the efficiency, transparency and accessibility of the dispute resolution process for a number of years. These changes create certainty in the process by mirroring the government-to- government dispute resolution process and include monetary penalties for non-compliance. While there are still many areas where improvements to our internal trade regime are necessary, this is a positive step forward for Canadian business and for the Canadian economy.