The FCCQ urges the government to resist the temptation to increase corporate taxes in its next budget. Canada has the characteristics of a small economy with a very large international component. The intensity of business competition suggests that it should rely instead on investment growth.
The FCCQ therefore urges the government of Canada to seize the opportunity afforded by its next budget to equip Canada with a smart taxation system that makes businesses more competitive and attracts foreign investors. Another objective that should be pursued is to promote a business climate that improves productivity through investment and innovation. Productivity growth, which relies in large part on innovation, has for many years been one of the main priorities of the governments of Quebec and Canada.
Unfortunately, despite their efforts, Canada and Quebec continue to lag far behind the United States and other industrialized nations in terms of productivity. One of the main reasons for the productivity gap is the relatively low level of private investment. The FCCQ therefore recommends, in particular, that the Government of Canada increase investment tax credits and enhance investment loan programs for Canadian businesses, particularly small and medium-sized businesses, and make R and D tax credits refundable to enable businesses that are making little or no profit to continue to innovate.
Third, Canada's aging population will have a negative impact on consumer spending in Canada. Domestic demand will not increase as quickly in the future and, consequently, the Canadian economy will have to focus more on exports in order to grow. International sales, the diversification of exporters and Canadian business activity abroad bring very significant benefits. The FCCQ recommends that the government accelerate the negotiation of trade agreements, particularly those leading to a Canadian exemption from the "Buy American" clause and to accelerate negotiations on a free trade agreement with the European Union.
On the issue of greenhouse gas reductions, the FCCQ wishes to emphasize that, if the government wishes to invest in sustainability, without slowing business development, it will have to emphasize the use of various green technologies to achieve its objectives.
In Quebec, 40% of GHG emissions are related to transportation. We therefore ask that this aspect be taken into consideration in GHG reduction objectives. Investments promoting the greater use of public transit or electric transportation would definitely be promising.
In conclusion, government intervention in the economy has two main objectives: to create wealth and to redistribute it. The two should not be confused. The government must ensure that its actions do not thwart the creation of wealth, the entrepreneurial spirit or efforts to become more efficient. In other words, the government must ensure that its intervention supports the growth of its economy.
Thank you.