Thank you very much, Chair Rajotte, for allowing us to address the committee for this year's pre-budget consultations.
My name is Art Sinclair. I am vice-president of the Greater Kitchener Waterloo Chamber of Commerce. Our organization appreciates the opportunity to provide perspectives on the national economy and, most importantly, on the federal government's role in managing the current recovery.
Our chamber, sir, has over 1,700 members, representing all sectors of our local economy. The membership includes small, medium, and large employers who provide 70,000 jobs in one of Canada's most progressive and diverse regions.
As Minister Flaherty noted in last January's budget speech, industrialized nations of the world were taking and are continuing with unprecedented action to inject money into their economies in response to the global recession. The magnitude of this crisis necessitated swift action to mitigate the severity of the downturn, restore confidence, and promote recovery. A three-year $46-billion fiscal stimulus package was subsequently introduced in the 2009 budget.
The Waterloo region has benefited from some major investments in local post-secondary sectors through the knowledge infrastructure program. Conestoga College will receive federal and provincial funding totalling $72 million for increasing their educational capacity in advanced manufacturing and construction trades, renewable energy, and health care. Our chamber has been a strong advocate for increased government funding in skills and workforce development across all sectors of the regional economy.
Increasing the ability of local post-secondary institutions to meet future employer demands is critical for competing in global markets. We therefore recommend that the federal government continue with ongoing efforts to implement all announced stimulus measures to ensure continued economic growth and productivity.
With respect to fiscal measures for the next federal budget, we, like many business organizations across Canada, have been concerned with deficits at all levels of government. Rising debt and the accompanying interest payments severely constrain flexibility and will reduce the ability to address ongoing national competitiveness issues.
In July of this year, CIBC Economics indicated that while federal budgets will be in deficit over the next few years, Canadians likely won't be saddled with the massive debt and interest costs that plagued the nation nearly two decades ago. While stimulus spending and other demands have placed us in a tenuous situation, our fiscal standing, according to CIBC chief economist Avery Shenfeld, is not at risk; therefore, a cautious approach moving forward is critical for maintaining this position of stability.
Our second recommendation is that, in order to restore confidence for the future, Canadians must be presented with a viable strategy for balancing the books and avoiding structural deficits. Two days ago, on October 20, TD Economics released a report indicating that a fairly uniform national and global shift towards fiscal restraint is looming in the near future. According to report authors Don Drummond and Derek Burleton, current governments are likely working with less freedom than during the mid-1990s. Two forces in particular potentially limiting fiscal flexibility will be the likelihood of an historically slow rate of trend growth across the country and age-related spending challenges, or significant funding required for the health care system.
The October 20 TD report indicates that in order to return the aggregate budget balance to zero by fiscal 2015-16, which is still fairly unambitious, program spending growth should be held to 2%. Our chamber, consistent with the recommendation from the Canadian Chamber of Commerce in their submission to this committee earlier this fall, calls on the federal government to contain annual increases in program spending to 2% to 3%, in line with growth in inflation plus population, commencing in 2012-13 when more solid economic conditions emerge.
In conclusion, preserving public trust and the sustainability of public finances are essential for recovery. Policies must be implemented that promote employment, encourage entrepreneurship, enhance productivity, and strengthen long-term national competitiveness. While we address the current challenges and the economic realities of 2009, we must also focus on initiatives for long-term prosperity.
Thank you.