Thank you, Mr. Chair and fellow committee members, for having us here today.
My name is Alla Drigola Birk and I am with the Canadian Chamber. My colleague Alex and I are pleased to be here to speak on behalf of the 200,000 businesses that the Canadian Chamber represents through our chamber network, industry association and corporate members.
It is no secret that right now is a critical time for the Canadian economy. Canada faces strong headwinds as our economy comes off the postpandemic bounce and heads towards challenges that originate both at home and abroad. Just as businesses have begun to recover from the pandemic, they are facing the spectre of supply chain bottlenecks, a tight labour market, rising inflation and significant debt loads.
The most recent Canadian survey on business conditions, conducted by the Canadian Chamber and Statistics Canada, identified three key areas that will be the biggest challenges for businesses over the next three months. Of the three, rising costs was by far the top challenge. This includes rising inflation—a concern for 60% of all businesses—rising input costs, rising transportation costs, rising interest rates, rising debt costs and more. I would like to highlight that the majority of businesses reported that they are unable to take on more debt or do not know if they can take on more debt, with 52% of all businesses falling into this category. This is especially true for small businesses with fewer than 20 employees.
The second biggest obstacle will be labour challenges, including recruiting and retaining employees, as well as an overall shortage in the labour force. Finally, the third most pressing obstacle is the ongoing supply chain issues.
We draw these points to your attention today because they underscore the issue at the heart of our key ask, which is that the government support businesses via measures that support economic growth. The opportunity before the government for budget 2023 is to support Canada's businesses, the workers they employ and, in turn, the economy as a whole.
To assist in identifying some key items to grow the economy, the Canadian Chamber has brought forward 22 distinct recommendations under six themes in our pre-budget submission. Due to time constraints, we will not go into each recommendation in detail today, but I want to highlight two recommendations in particular, and introduce a new one.
The first is to ensure that businesses have the right people in place. This needs to include working with the provinces and territories to establish more supports to upskill and retrain workers, to reduce the barriers to hiring highly skilled foreign talent and to enhance the systems and processes for foreign credential recognition. Many of these are issues that span both provincial and federal jurisdictions, so constructive, effective collaboration is critical.
Second, we recommend that Canada modernize its regulatory regime by committing to evidence-based, data-driven regulation and applying an economic lens to all regulatory mandates. This is critical for ensuring that new programs and regulations take into consideration the economic impacts they have, similar to how the government has implemented a gender lens for new initiatives.
Third, we need to ensure that the small businesses that took on a significant amount of pandemic debt are not being unfairly penalized. This speaks to recent reports of CEBA loans being recalled for businesses that applied in good faith, were approved based on the criteria and are now at a loss as to why they can suddenly no longer receive the forgivable portion. The CRA must explain why these small businesses no longer qualify for the forgivable portion, and must ensure that non-fraudulent cases are being handled appropriately and fairly based on the terms of their original CEBA agreement.
I will now pass it over to Alex to speak to some of the key tax measures in our submission.