BRIEF FROM THE GREATER KITCHENER
WATERLOO CHAMBER OF COMMERCE
The Greater Kitchener Waterloo Chamber of Commerce and Waterloo Region – A Profile
The Greater Kitchener Waterloo Chamber of Commerce serves over 1500
members representing all sectors of the local community. Our membership
includes small, medium, and large employers in one of Canada’s most progressive
and economically diverse regions.
Waterloo Region is designated as Canada’s tenth and Ontario’s
fourth largest urban area, with a current population of 530,000 expected to
reach 729,000 by 2031. The regional Gross Domestic Product in 2006 was $21.5
billion, with an estimated $347 million directed to business R&D
expenditures.
Our local economy is among the most diverse in Canada, with
concentration across advanced manufacturing, insurance, automotive, and
information technology. Industry analysts have frequently cited this diversity
as one of the fundamental strengths and foundations in the Waterloo Region
entrepreneur-driven economy.
Priority Recommendations for the Federal Budget
1) Deficit Reduction and Limiting Growth in Government Spending
A priority measure for the federal government and their
provincial/territorial counterparts should be returning to a balanced position
over the medium term. Deficits can drive up interest rates, drain government
savings, and reduce the flexibility for responding to unexpected circumstances.
Our Chamber supports the plan, outlined in the June 6, 2011 Budget,
for returning to a balance by 2014-15 without raising taxes. A June 6, 2011
report from CIBC World Marketsnoted
that stronger than expected 3.2 percent economic growth during the calendar
year saw the deficit fall to $36.2 billion, a $13 billion improvement from
projections in the 2010 Budget and $4 billion lower than the Budget delivered
in March of 2011. Therefore, a balance in less than five years is now a
realistic expectation.
The June 6 report from CIBC noted that future economic growth alone
will not close the revenue-spending gap. Program spending is expected to
increase by 3.1 percent in 2011/2012. While that estimate is higher than
previously anticipated, the major single factor is the transitory $2.2 billion
for Quebec sales tax harmonization.
The Canadian Chamber of Commerce has proposed that growth in
program spending should be restrained to approximately 1.6 percent through
fiscal 2014-2015. Also, the scope of spending reviews should be broadened
beyond direct program expenses. All government spending should be reviewed on a
four-year cycle to determine where the benefits are greatest and areas where
expenditures can be reduced or eliminated.
Our Chamber opposes any cuts in transfer payments to provincial and
territorial governments. Waterloo Region per-resident funding for many critical
social and health care services is among the lowest in Ontario, therefore any
decrease in federal support would create significant budgetary pressures for
local hospitals and service providers.
The Greater Kitchener Waterloo Chamber of Commerce Health Care
Resources Council coordinates physician recruitment activities across our
municipalities. Through our efforts with many stakeholders, we have
significantly decreased the number of local residents without a family doctor.
Continued support for health care services will be critical as we move to our
goal of eliminating the physician shortage in five years.
The two-year extension of the accelerated capital cost allowance
for investment in machinery and equipment will benefit manufacturers across
Waterloo Region and Canada. Our Chamber has been a supporter of this initiative
since it was introduced in 2007 and recommended extension in subsequent
pre-budget submissions to the House of Commons Finance Committee.
Recommendations
The federal government should maintain their commitment to no new
business and personal taxes as the Budget moves towards a balanced position by
2014-2015.
Growth in program spending should be limited to approximately 1.6
percent annually until the Budget is balanced.
Transfers to the provinces/territories for critical health and
social services should not be cut.
2) Red Tape Reduction
Red tape is a serious barrier to business and a major disincentive
to investment. Excessive paperwork, delays for project approval and demanding
reporting obligations are a concern for businesses of all sizes in all sectors
of the national economy.
The Canadian Chamber of Commerce (CCC), in a June 8, 2011
submission to the Red Tape Reduction Commission, noted that the regulatory
burden placed on businesses is further compounded by the strict approach to
compliance assumed by government officials. A shift needs to occur from a zero
tolerance-process focused enforcement to an outcome sensitive approach. A clear
accountability framework for regulators is required.
In the taxation portfolio, the administrative and compliance burden
on businesses of all sizes must be reduced. Small and medium-sized enterprises
(SMEs) carry a disproportionate share of the costs as the smaller a business,
the higher the tax compliance cost per employee. Factors contributing to tax
compliance costs include the high amount of paperwork, the complexity inherent
in the tax system, frequent changes in tax legislation, different rules across
jurisdictions, and the requirement to deal with multiple audits.
Recommendations
In order to decrease excessive administrative burdens for business,
the following guidelines and principles should be recognized:
· Single points of contact where businesses can
obtain all relevant information and complete all necessary procedures by
electronic means need to be established;
· Prior to drafting a regulation affecting
business, the process needs to be communicated, defining the objective and cost
of compliance. Sunset clauses should be considered;
· Affected business sectors should be consulted
and changes not made without appropriate notice;
· Information needs to be disclosed regarding
whether a proposal is new or a revision to existing regulations.
3) Infrastructure Funding for Post Secondary Institutions
The University of Waterloo, Wilfrid Laurier University, and
Conestoga College have all benefitted from the federal Knowledge Infrastructure
Program (KIP) and accompanying financial support from the Ontario Government to
significantly upgrade their facilities.
It is estimated that joint federal-provincial post-secondary
infrastructure funding over the past two years created 11,000 jobs, increased
revenues for local municipalities, and generated spinoff benefits for supplier
companies that provide materials and service to construction projects.
In December of 2010, the deadline for the completion of all projects
under the KIP was extended from March 2011 to October 2011. Based on the
overall relative success of this initiative and the on-going importance of
training and skills development for the Waterloo Region and national business
sectors, longer-term funding should be available for ensuring campus
infrastructure meets workforce and student requirements.
Recommendation
To ensure post-secondary institutions across Canada have sufficient
infrastructure, both new and renovated, for addressing the growing number of
students entering the system over the next five years, the Knowledge
Infrastructure program (KIP) should be extended.
4) Pension Reform
Issues related to pension reform and retirement income are
particularly important for the Waterloo Region business sector, as we are home
to 12 major insurance companies with over 7,000 total employees. Major
organizations include Sun Life Financial, Manulife Financial, The Economical
Insurance Group, and Equitable Life Insurance.
In November of 2010, our Chamber provided a written submission to
the Ontario Ministry of Finance in response to their discussion paper Securing
Our Retirement Future. The Ontario Government has been conducting a series
of recent consultations with stakeholders on the retirement income system with
the objective of formulating a provincial position for advancing to the federal
government and other provinces/territories.
Our submission last November noted that the national retirement
system is among the best in the world and not in need of fundamental reform.
Generally, if governments want to help Canadians save more, the best option
would be a legislative and regulatory regime that would allow more small and
medium sized employers to offer workplace savings plans to their employees.
Our Chamber also supports the establishment of Registered Health
Savings Plans, or RHSPs, a federal instrument that would allow Canadians to
create a health spending account using pre-tax dollars that could be withdrawn
for approved costs on a tax-free basis in retirement.
Recommendation
The federal government should review a Registered Health Savings
Plan (RHSP) for relieving health care costs and assisting employers and
employees prepare for post-retirement expenses.
The Greater Kitchener Waterloo Chamber of Commerce would like to
thank the House of Commons Standing Committee on Finance for considering our
recommendations.