Thank you. I'll be pleased to answer questions in both languages after my presentation, but I will do my presentation in French.
Thank you very much for inviting the Chamber of Commerce of Metropolitan Montreal to share its recommendations as part of the pre-budget consultations in advance of the federal budget.
We represent all of Montreal's business community, which, alone, accounts for 50% of Quebec's economy. It is our view that the next federal budget should address these five priorities: supporting private investment and innovation; expediting infrastructure projects through swifter distribution of funding; encouraging the internationalization of our companies; promoting tax fairness and competitiveness; and setting out a plan to balance the budget. I will spend the next five minutes discussing each of these points.
Montreal's business community sees the economic climate as favourable and the outlook for growth as extremely positive. That view also applies to job growth, especially in Montreal, where we are nearing virtual full employment. I can come back to that later.
Regarding the first priority, we would like to see very strong support for private investment and innovation. We applaud the government on its creation of the innovation superclusters initiative. We have seen that the private sector is on board and ready to invest, so it would be a shame to miss out on promising projects. We realize that the government wants to support a maximum of five projects, but it is our view that the next budget should identify ways to expedite the projects that have been submitted. Otherwise, we will miss out on opportunities for growth.
As I mentioned, Montreal is nearing full employment, and the new economy will also impact workforce availability. Therefore, the budget should set out measures to make the hiring of foreign workers easier. Temporary work permits go a long way towards meeting labour needs in all technological realms, including the booming video game and animation sectors, delivering tremendous value added to our economy.
The government should also focus attention on the requalification of workers in order to maintain the country's productivity. That means partnering with the provinces, having foresight, and laying the groundwork. If the government does nothing to address the issue, a portion of the population will be left behind, and we can't afford to let that happen.
Furthermore, the government should ensure that the personal income tax system is aligned with a return to work, meaning that the system must be competitive. Canada is one of the most heavily taxed countries in the OECD. It is important that all the measures in place allow the maximum number of people to participate in the job market.
Our second priority concerns the timelines for infrastructure projects. The House supported infrastructure spending because the business community relies on infrastructure, in the transportation and digital sectors alike. However, releasing and disbursing funds for major projects sooner is key. VIA Rail's high-frequency train project is one example that comes to mind. The distribution of funding has to allow for a timely analysis leading to the project's implementation.
We have a number of different infrastructure projects at the Montreal port, such as the renewal of the icebreaker fleet operating on the St. Lawrence River. That's a crucial project. The port is a veritable economic gateway, not just for Quebec and Montreal, but also for the entire northwest of North America. With the Canada-European Union Comprehensive Economic and Trade Agreement coming into force, capitalizing on these infrastructure projects is paramount.
Our third priority is the internationalization of companies. There is no use in telling you that NAFTA is a huge concern for the business community. I think the budget should include a plan B, in case the NAFTA negotiations don't work out. Companies will face immediate consequences in the short term, so the government should plan for that in the budget. We also need to adopt measures that encourage market diversification, to open up markets with other trading partners, such as Japan, China, and India. That said, the measures in place to support businesses in the international market must be consistent. From time to time, the government organizes missions, but companies can't access risk guarantees through Export Development Canada. Therefore, program consistency is key in order to speed up the pace of market diversification.
Our fourth priority is tax fairness and competitiveness. Tax fairness is an issue that merits review. The government seems to be open to that, and we are very glad. Nevertheless, we would like to know the specifics and have the assurance of predictability. We are indeed supportive of fairness, but any strategy must allow businesses to make investments and take risks. For that reason, we'll be paying special attention to the changes the government comes out with.
We are extremely pleased with the reduction in the tax rate for small and medium-sized businesses. Ensuring our businesses are competitive from a tax standpoint is even more important given the aggressive tax reforms the U.S. is considering.
We cannot ignore those reforms completely, and we absolutely have to maintain our competitiveness. Moreover, sales taxes are often preferred to payroll or income taxes, since they do far less harm to the economy.
As for the complex issue of e-taxation, we feel that Canada must encourage deep reflection on the issue as a matter of urgency, so that we do not end up with a two-tier system. We want those of our companies that invest in e-commerce to be treated in the same way as foreign companies. We need to embrace fairness in this respect, as other countries in the world are doing.
The last point is about the need to have a plan to return to balanced budgets. The international economic situation is still the source of a number of uncertainties. We have to be ready for all eventualities, whether in the price of natural resources, the risks around the NAFTA negotiations, or even the rise of protectionism in certain countries.
We therefore recommend that the government should remain prudent and should give itself a cushion of from $3 billion to $6 billion in order to be ready for all eventualities. Spending must also be rigorously managed and there must be a plan to return to balance, with intermediate targets for annual deficits so that we can see them coming.
Thank you very much for your attention; I will gladly answer your questions.