The Certified General Accountants Association of Canada (CGA-Canada) gives the 2003 federal budget a better than overall passing grade, with special mention for its promise of improved transparency and accountability.
Specifically, CGA-Canada endorses the escalated RRSP contribution ceiling of $18,000, elimination of the federal capital tax and a 50% increase in the small business deduction limit to $300,000.
"While John Manley concentrates heavily on big ticket spending initiatives in his first budget, the Finance Minister also manages to strike the right balance especially with small business and individual taxpayers," concludes James Dunphy, FCGA, a member of CGA-Canada's Tax and Fiscal Policy Committee.
After repeated calls for better measures to manage taxpayers' dollars, CGA-Canada is pleased to see that federal health transfers to the provinces and territories will form a separate and transparent envelope. There are other positive actions as the government moves to full accrual accounting and greater accountability of arms-length foundations.
CGA-Canada had been concerned that wide-ranging spending demands might have led the government back into the red. "However, Mr. Manley has managed to stay the course and continue on the government's prudent course of living within its means," said Johanne Leduc, FCGA, President of the Ordre des CGA du Québec Tax Committee.
The government's debt-reduction measures are less aggressive than CGA-Canada called for. The association feels it would have been preferable for Mr. Manley to spend half the surplus or $4.1 billion this year in paying down the debt instead of just $3 billion.
The 40% reduction in the Air Travellers Security Charge is welcomed by CGA-Canada but the Association still objects to this levy, which goes directly to the government's general revenues and has no direct or accountable link to improved airport security.
CGA-Canada still feels there should be a full debate on long-term tax reform under the auspices of the House of Commons Standing Committee on Finance. At the same time, it welcomes the budget promise of improved corporate governance in the coming months through changes to the Canada Business Corporations Act.
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