Perspective
The Case for Tax Cuts
With a federal budgetary surplus of $8.9 billion this year and expected budgetary surpluses in excess of $25 billion over the next five years, the federal government should have no reason to delay the tax cuts Canadians want and need to stay competitive.
Tax cuts will go a long way to increase Canada's competitiveness. Because capital has become global, Canada must be able to compete in the world marketplace. A competitive tax policy attracts investment, fosters employment, and raises incomes. It helps secure qualified and skilled workers.
CGA-Canada's proposals are simple. The government should increase the taxable threshold by 25 per cent and upper rates should be expanded. We also strongly believe the government should focus on reducing the disincentives and inefficiencies in the system. Businesses would benefit from accelerating the proposed elimination of capital taxes to quicken the day Canadian effective rates on capital mirror U.S. rates. We also believe the federal government should review the capital cost allowance system and enhance rates on new capital equipment to stimulate short-term business investment.
This, of course, can't come at the price of fiscal imbalance. We will remain vigilant in our call to ensure that the federal government maintains a firm commitment to fiscal prudence and expenditure control. It also means working towards retiring the debt. After all, the nearly $36 billion spent every year in public debt charges is money that isn't used to fund health, education, and child care.
As a women entrepreneur, there are a number of improvements I would like to see in this realm. I believe that for the tax system to be supportive of entrepreneurs the federal government should increase the number of options available. Access to Registered Retirement Savings Plans for investment could provide needed capital. In addition, increasing the annual limit for contributions to RRSPs could act as a tax saving vehicle, particularly for women entrepreneurs starting or growing their business. And, building a nationally coordinated approach to day care programs is essential. Early learning and child care programs and services play an important role in promoting the healthy development of young children. These programs also support the participation of women in the work force, as the programs serve to ease the burden faced by working mothers.
A number of improvements to Employment Insurance need to be made. There ought to be "opt-in" provisions for Employment Insurance for entrepreneurs. Opting-in becomes a business decision and allows all entrepreneurs, if they chose, to benefit from some financial support for extended parental or sickness leave. The government should review EI provisions to ensure there are not inherent biases against family members that are employed in a family-owned business. And finally, EI premiums need to be brought into balance with EI costs, as a reduction in EI premiums would be beneficial to the economy and job growth.
As the newly-elected Chair of the Board of Directors of CGA-Canada, I will make sure that we continue to deliver this strong message and others to Ottawa. Prime Minister Paul Martin can continue to lead the minority Parliament, but only if he and his Ministers are able to heed the call of organizations such as CGA-Canada. After all, we have a good idea what our more than 62,000 students, members, and their clients want.
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