Budget Scorecard

CGA-Canada's 2007 Federal Budget Response

CGA-Canada has provided recommendations to the federal government on priorities for increasing productivity, reducing taxation for individuals, families and business, and improving regulatory efficiency and reducing red tape within an acceptable fiscal framework. Here is how Budget 2007 measures up from CGA-Canada’s point of view.

Government’s supporting role

Productivity & taxation

Productivity & investment

Productivity & regulatory efficiency

Government’s supporting role

	CGA-Canada Proposals		2007 Budget
	Sound fiscal and tax policy plays an important role in Canada’s economic performance. The government needs to balance the budget, limit program spending growth and commit to repaying the federal debt.		Canada’s overall fiscal situation is stronger than projected. The federal budget surplus will be $14.1 billion in 2006-07 , $10.6 billion in 2007-08 and $10.4 billion in 2008-09.
			Canada is on track to reach its goal of debt-to-GDP ratio. In fact, the federal debt-to-GDP ratio will decrease from 35 per cent in 2005-06 to 30 per cent by 2008-09. Canada is on track to reach the objective of 25 per centdebt-to-GDP ratio by 2012-13.
	Reform management culture of the federal public sector to better direct resources to program priorities and to ensure current and future federal spending generate highest program value.		Elements of the Expenditure Management System are: Departments and agencies will manage their programs to clearly defined results, and assess their performance against those results. The Treasury Board Secretariat will oversee the quality of these assessments and ensure that departments explicitly address risk as well as cost effectiveness. Cabinet will systematically review the funding and relevance of all programs spending to ensure that spending is aligned with priorities. Cabinet will undertake a rigorous examination of all new spending proposals, taking explicit account of the funding, performance and resource requirements of existing programs in related areas.

Comments

CGA-Canada welcomes the government’s commitment to paying $9.2 billion towards the debt in 2006-2007.CGA-Canada welcomes the re-commitment to the Expenditure Management System but calls on Cabinet to address ongoing program spending, not only new spending, to ensure programs continue to meet the objectives and priorities of Canadians.

Grade:

Pass

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Productivity & taxation

	CGA-Canada Proposals		2007 Budget
	Reduce personal income tax		The government announced measures to support families, including a working income tax benefit and a registered disability savings plan. It also amended the child tax credit and increased the age limit to 71 from 69 for registered retirement savings and registered pensions. The government proposes to increase the lifetime limit to contributions to registered education savings plans.
	Improve tax measures for businesses		Small business and entrepreneurs will benefit from measures introduced including the increase in the lifetime capital gains exemption and reducing the tax compliance burden.
	Adjust any capital cost allowance rates that do not line up with the true economic life of the relevant asset.		Measures include increasing the capital cost allowance rate from 4 to 10 per cent for buildings used in manufacturing and processing, and from 45 to 55 per cent for computers.

Comments

Measures are supportive of families but the government can do better in reducing corporate income taxes to improve growth and productivity.

Grade:

Pass

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Productivity & investment

	CGA-Canada Proposals		2007 Budget
	Promote and streamline the administration of the Scientific Research and Experimental Development (SR&ED) tax credit program.		The federal government commits to identify opportunities to improve the SR&ED program, including its administration, to further encourage research and development within the business sector.
	Invest in more research-related commercialization capacity.		Centers of Excellence in Commercialization and Research will receive $350 million in 2006-07 and the next two years.
	Other measures in support of the knowledge economy		Government announced a number of investments towards making the labour force more educated and skilled.

Comments

The knowledge agenda is one to watch. Strategic investments should reap rewards in the medium term.

Grade:

Pass

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Productivity & regulatory efficiency

	CGA-Canada Proposals		2007 Budget
	Work with the provinces and territories to fully implement all aspects of the Agreement on Internal Trade especially those relating to labour mobility.		The federal government commits to building on the momentum provided by Alberta and British Columbia’s agreement on Trade, Investment and Labour Mobility (TILMA). The federal government will examine with the provinces and territories on how the TILMA provisions could be applied more broadly to reduce interprovincial barriers to trade and labour mobility.
	Reduce the administration burden on business by cutting paperwork.		Plan to reduce the federal paper burden by 20 per cent by November 2008.
			Reduction of the tax compliance burden on small business by decreasing the frequency of their tax remittance and filing requirements.
	Undertake a thorough review, including a cost/benefit analysis, of all existing and proposed federal regulations and eliminate where appropriate those regulations that no longer provide a significant benefit to society and those that overlap with provincial and territorial regulations.		Introduction of a new performance-based regulatory system with a commitment to efficient, timely and cost-effective regulation, underpinned by clear service standards and accountability for federal performance.
	Continuously review Canada’s framework legislation (such as the Canadian Business Corporations Act, the Competition Act or the Bankruptcy and Insolvency Act) to ensure that it is modern, flexible and responsive to today’s economic realities.		The federal government will ask an expert independent panel to undertake a comprehensive review of Canada’s competition policies and report, before Budget 2008, to the Minister of Industry on options for future legislative amendments.

Comments

The Federal Government has heeded the advice of CGA-Canada and is implementing an aggressive plan to tackle over regulation and red tape.

Grade:

Pass

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Budget Scorecard

CGA-Canada's 2007 Federal Budget Response