Thank you very much.
Good morning, everyone. Thank you for the invitation.
As part of the pre-budget consultations, I'm going to rhyme off about a dozen recommendations.
First, the new fiscal framework presented by the government needs to be better defined. Like the Parliamentary Budget Officer, I recommend improving transparency on so-called capital investment measures, which are actually similar to asset creation. The International Monetary Fund, while noting the usefulness of the new budgeting framework, also noted that more work is needed.
Second, a debt anchor or debt-to GDP ratio should be established, for example, as the International Monetary Fund has once again suggested.
Third, the impact of defence spending on the fiscal framework should be more transparently assessed and reported on. The latest economic update in the spring reiterated that Canada is on track to invest 5% of GDP in the defence sector by 2035, which is less than 10 years from now, but it doesn't say whether that is built into the fiscal framework.
Fourth, before implementing the $6 billion for skilled trades training initiative, which was also in the spring economic update, the federal government must hold discussions with the provinces, for the simple reason that training falls under provincial jurisdiction and encroaches on their areas of jurisdiction. The federal government should also learn from certain past experiences and be careful not to repeat mistakes that were made with any of the provinces. So they should put some kind of guardrail in place to optimize the results of this new initiative.
Fifth, in our opinion, the federal fuel excise tax exemption seems ill-advised from a public finance standpoint. It would be better not to extend this tax holiday and to maximize the chances of restoring the tax as it was and eventually indexing it. I would remind you that a tax holiday of this nature benefits higher-income households more than low-income households. So in order to facilitate the reintroduction of the tax, consideration should probably be given to putting it into a community development fund or some other fund dedicated to that.
Sixth, in the current housing context, it would be more beneficial to contribute to increasing the supply of affordable rental housing rather than adding another measure or enhancing the many existing measures for home ownership. The federal government should therefore think about certain avenues, such as converting residential buildings to non-market housing, which would cost much less than the subsidies mentioned. One option is to defer the capital gains deferral to private building owners if they sell to a non-profit organization in order to reinvest the proceeds of that sale into the construction of new housing. In fact, that was an election promise. Another option would be to assess the possibility of a capital gains exemption when someone gives a rental property to a non-profit organization, which turns it into non-market affordable housing. These are not very expensive ideas that could be worth analyzing.
Seventh, with respect to the $1.7 billion in federal funding for housing to be provided to the provinces to improve housing supply, the federal government must ensure that each province receives its fair share. Provincial differences could make it more difficult for some of them.
Eighth, we must not give up on international taxation. Canada's tax system needs to be reassessed in light of juxtaposed systems, including the global minimum tax.
Ninth, even though the digital services tax has been scrapped, we need to rethink that kind of tax. On the one hand, France, Italy and the United Kingdom have retained that tax method. On the other, its abolition does not seem to have helped Canada make any gains in settling the trade dispute with the United States. This tax on the digital economy might even help us better capture the profits that will be made from artificial intelligence and that could reduce some other more traditional tax bases.
Tenth, without going into detail, I would also suggest establishing a framework for the taxation of cryptoassets.
I know that time is running out, so let me conclude by saying that a lot of budget announcements are made outside budget periods, whether it's the traditional budget period or economic updates. So, for my eleventh recommendation, in the absence of a national emergency, it would probably be a good idea to make the announcements within more specific budget frameworks.