Thank you.
Good morning.
My thanks to the Standing Committee on Finance for inviting us to provide our comments on the upcoming budget.
In its comments, the Quebec Employers Council, or CPQ, is basically trying to answer the questions the committee asked about measures that would increase the productivity of Canadians and the productivity and competitiveness of Canadian companies.
Those two questions are intrinsically linked. The productivity of companies is a result of the productivity of the workers, and the productivity of the workers depends largely on the investments made and the processes put in place by employers.
Let me start by providing some points by way of background.
The first point is the digital and technological revolution, the fourth industrial revolution, as it has been called. Then there are the changes that will be necessary in the fight against climate change; they require investment, innovation and an urgent need to adapt the skills of the workforce.
Then there is the situation in America. Access to the American market is likely to be more difficult in the coming years. America’s likely reform of the taxes on companies and individuals will doubtless have significant effects on the competitiveness of our companies. Finally, we must not forget the demographics of our aging society.
To meet the challenges posed by these structural and cyclical changes, Canada has to maintain a most favourable business environment in terms of taxation and regulation. It will also require much more agility in government decision-making in order to provide answers more quickly, departing from a rigid structure in order to reduce delays in approving and authorizing projects.
The pillars needed to boost the Canadian economy in a sustainable way are innovation, human capital, and private and public investment.
In terms of help for companies, the government should invest in programs that have a structural leverage effect on productivity, innovation and commercialization, as well as on exports and on reducing the companies' environmental footprint. For example, it would be appropriate to equip Canadian companies with the goal of profiting from the new opportunities provided by the Comprehensive Economic and Trade Agreement, CETA, or, for large companies, to make research and development tax credits refundable.
We must not forget the importance of regulating online commerce and the distribution of digital content more fairly in order to maintain the competitiveness of Canadian companies. This problem with online sales also deprives governments of significant tax revenues.
We applaud the government's openness in amending some aspects of the proposed tax reforms affecting small or medium businesses, SMEs. We reiterate the importance of taking the time to thoroughly analyze the economic consequences of the proposals, especially those possible consequences on entrepreneurship, business transfers, and risk taking.
The reduction of taxes on SMEs is certainly good news. But attention must be paid so that the growing gap thereby created with the rate for large companies should not become a disincentive to growth. Large companies must also be competitive, of course.
The CPQ would like to stress the importance of investing in infrastructure. But it has to be done in the most strategic and effective way possible, specifically by investing in Quebec ports and airports, as well as in transportation hubs. Let us also not forget rail transportation, or key projects in mass transportation, as governments did with the Caisse de dépôt et placement du Québec for the metropolitan electric network.
With our population currently aging, the government must speed up the procedures surrounding economic immigration, temporary workers, seasonal workers, and investor and entrepreneurial immigrants.
Finally, the CPQ stresses the importance of not becoming mired in structural deficits and of the need to prepare a clear plan to return to balanced budgets in a few years, because the financial security of generations to come is involved. This is also why the CPQ would like to see initiatives targeted more on increasing private investment than simply on public sector spending.
You will find other comments in the brief we have submitted.
I will gladly answer your questions in either official language. Thank you very much.