Thank you, Mr. Chair.
My name is Tina Kremmidas and I am the chief economist at the Canadian Chamber of Commerce.
It gives me great pleasure to come before this committee to present the views of the Canadian chamber on the four issues that are the focus of this year's pre-budget consultations.
As many of you know, the Canadian Chamber of Commerce is the largest and most broadly based business association in Canada, a network of over 420 chambers of commerce and boards of trade representing 192,000 businesses of all sizes in all sectors of the economy and in all regions of the country.
Many of our members entered the summer with great optimism. Canadians were also brimming with confidence. Now, in the face of alarming events abroad, some are less sure.
The G-20 leaders summit in France this week presents an opportunity for the G-20 to restore confidence by taking urgent and decisive action to rein in debt and refocus on delivering strong, sustainable, and balanced growth. Our president and CEO, Perrin Beatty, is heading the Canadian delegation to the G-20 business summit.
With the current economic climate, some would prefer that the government change course. This is not our view. The Canadian Chamber continues to call on the federal government to balance its books by fiscal 2015-2016 and to do so by restraining annual government spending growth. As we have seen from experiences abroad, as well as in Canada in the 1990s, deficits can quickly spiral out of control, triggering a financial and economic crisis. Investors and markets need assurance that the government will not veer away from the current plan to return to surplus in the medium term.
Slaying the deficit dragon is also in the long-term interest of the country. We need to get our finances in order to gain the financial flexibility to deal with the gale force of an aging population and tackle areas that are crucial to Canada's long-term competitiveness. This includes reducing high and uncompetitive marginal personal income tax rates that discourage people from working, saving, and upgrading their skills.
To create quality sustainable jobs in Canada, we must embrace a culture of innovation. Innovation has led to new industries and new jobs in high tech and advanced manufacturing sectors. Yet when it comes to the capacity for innovation, the World Economic Forum ranks Canada in 24th place. Canada ranks near the bottom among OECD countries in getting innovative products and services to the marketplace.
To foster innovation, the government must focus on implementing a re-invigorated national strategy, with a spotlight on research, training and retraining, and education. We must build a strong interface between post-secondary institutions and the private, public, and non-profit sectors to accelerate the pace of discovery and commercialization, and turn Canadian research efforts into successes in the marketplace.
We must strengthen Canada's intellectual property rights regime and ensure SR and ED investment tax credits are being delivered in a predictable, consistent, and timely manner. At present, this is not the case.
Ensuring ongoing job creation also requires an ambitious and comprehensive strategy to boost our country's trade and investment ties with other nations.
Policy-makers should always be looking for ways to enhance the flexibility of Canada's economy and improve its performance. Eliminating interprovincial barriers to trade and labour mobility as well as eliminating burdensome regulatory procedures and reducing the tax compliance burden come to mind as areas in need of urgent action.
We recommend that the government launch a national consultation process focused on identifying ways to reduce the complexity of Canada's tax system and improve tax administration. As part of this, the government should undertake an independent review of the 260 or so tax preference measures that are part of the federal tax system, to determine if they are cost-effective and are achieving their intended purpose.