Good morning, honourable members of the finance committee.
Thank you for inviting me to speak. On behalf of our 11,500 members, the Toronto Region Board of Trade welcomes the opportunity to make a deputation today regarding the federal government's forthcoming budget.
Canada's waning economic competitiveness is of primary concern for the board and our members. Canada, once a beacon of prosperity, now faces a precipitous decline in productivity, with the nation now having suffered a declining GDP per capita for the fourth straight quarter. This is not a fleeting challenge but an urgent call for decisive action.
In addition to removing oft-cited barriers to internal trade and competition, we feel there are three immediate areas where the federal government should focus its efforts to bring Canada's weak productivity and investment growth back in line with leading OECD economies and reverse this concerning trend.
One is increasing support for manufacturing capital development projects that stand to markedly increase the region's productivity and bolster industrial development opportunity.
Two is lending greater support for the City of Toronto's capital projects and services, which facilitate economic development for the broader region and nation.
Three is ensuring taxes on technology and digital services remain aligned with international precedents and encouraging technology development, commercialization and adoption.
To begin, the American Infrastructure Investment and Jobs Act, the Inflation Reduction Act and the CHIPS Act have catalyzed a significant surge in U.S. manufacturing construction spending, particularly in high-value sectors such as computers, electronics and electrical manufacturing. Since 2022, these policies have quadrupled investments in these sectors, markedly enhancing America's competitive edge in manufacturing key components for the future global economy.
In contrast, Canada's manufacturing sector, which contributes approximately 10% to our national GDP, is at a pivotal juncture. To remain competitive, especially in advanced manufacturing, our businesses need support akin to their American counterparts. The exceptional return on labour presented by advanced manufacturing offers an excellent opportunity to invest in boosting our nation's productivity.
A prime example of this potential is the electric vehicle industry, notably Toyota's commitment to establish a battery factory in Canada. This venture is more than an investment in green technology. It's a strategic leap towards a sustainable future and a stronger technologically advanced industry. Federal support in this sector is essential. It will create new, highly productive and good-paying jobs, and it will position Canada as a leader in the global EV market—a market that promises cleaner air and reduced carbon emissions. Inclusion of Ontario's largest OEM automotive manufacturer in this vision will be critical to aligning our technological, environmental and economic objectives.
Turning to the City of Toronto's financial crisis, we are reminded of the vulnerabilities that our urban centres face. The truth is that Toronto's budget is broken and we need a new deal. We applaud the government for joining the new deal working group, but we want to emphasize that fixing Toronto's finances is not something the city can do alone. After more than a decade of surging population increases, Toronto finds itself choking on growth. As a result, federal goals related to public health, climate, mobility, housing and supply chain resiliency are increasingly out of reach. The financial challenges confronting Toronto are not isolated incidents but symptoms of broader systemic issues that threaten the economic health of not just Toronto but other major urban centres in Ontario.
The federal government's recognition and support of the city's investments in social support, transportation and economic development are crucial. Toronto is at the heart of an economically interconnected region. That's why investing in Toronto's infrastructure builds the financial network that sustains the economic vitality of regions extending well beyond the city limits. Enhancing community safety goes beyond traditional policing. It's about creating environments conducive to the well-being and productivity of every individual, thereby reinforcing the economic and social fabric of our society. These initiatives, though locally rooted, have far-reaching impacts that enhance the economic and social health of both the province and the nation.
In the realm of technology and digital services, the federal government must ensure its tax and regulatory policies are aligned with international precedents. This alignment is crucial. It fosters a predictable and stable environment for businesses, particularly those operating on a global scale. Companies thrive when they can anticipate regulatory landscapes, not just domestically but also in markets they serve internationally. Adhering to international standards helps in avoiding the complexities and potential conflicts that arise from a patchwork of unilateral regulations. This is particularly relevant in the digital domain, where services and products often transcend national borders. A harmonized approach reduces administrative burdens and compliance costs for businesses, encouraging them to invest more in technology development and commercialization.
As we consider the support for Toyota's EV battery factory, we deliberate on the means to avert Toronto's financial crisis and look to cultivate a national technology development ecosystem. It's essential that the principles of innovation, collaboration and sustainability guide decision-making.
Thank you.