ATLANTIC PROVINCES ECONOMIC COUNCIL
The Atlantic Provinces Economic Council provides coverage of the budget from the perspective of the eastern provinces. In addition to a summary of budget highlights, the Council’s analysis consists mostly of the impact of the 2009 Budget on Atlantic Canada. These include: boost Atlantic Canada’s renovations industry, valued at $2.6 billion in 2007, increased support for low income earners(47% of Atlantic Canada, versus 41% nationally), $280 million in potential infrastructure funding for Atlantic Canada, $100 million from the Community Adjustment Fund and a significant share in EI funding distributed based on unemployment rates (Atlantic Canada 10.2% in 2008). For a full analysis of the effect of the 2009 federal budget on the Atlantic region go-to:
www.apec-econ.ca
CANADIAN CENTRE FOR POLICY ALTERNATIVES
According to the CCPA, the 2009 federal budget fails on two important counts. First, it fails to expand Employment Insurance to ensure laid-off Canadians are eligible for benefits. CCPA Senior Economist Armine Yalnizyan suggests that 6/10 unemployed Canadians don’t get EI – a major problem that was not addressed in this budget. Second, the major infusion of infrastructure dollars requires provinces and municipalities to match every federal dollar with 73 cents of their own – a significant hurdle and potential delay in leveraging a much needed physical stimulus. Visit the Canadian Centre for Policy Alternatives for the full analysis:
www.policyalternatives.ca
THE CANADIAN CHAMBER OF COMMERCE
The Canadian Chamber of Commerce announced an attitude of cautious optimism in response to the federal budget. The Chamber’s analysis highlighted several important long-term priorities. The most significant long term investment was in infrastructure spending, a measure the Chamber suggests has not merely short-term stimulus but tremendous long-term benefits. The reduction of the tax burden on Canadians, raising the maximum Working Income Tax Benefit and accelerated CCA status for new business investment are further examples of potentially long-term stimulus. Finally, the Chamber noted with encouragement the aggressive measures taken by the Bank of Canada to ensure liquidity of credit for Canadian businesses and consumers. However, the price for these measures is high indeed. Expressing disappointment ,the Chamber insists more work needs to be done on the government’s plan to return the federal budget to surplus and to imagine how – after enormous recession spending – the government will be able to curtail its spending when the economy recovers. Read the Chamber’s full coverage:
www.chamber.ca
CANADIAN FEDERATION OF INDEPENDENT BUSINESS (CFIB)
CFIB sounded a note of caution looking at this year’s federal budget. While CFIB analysts suggested that the budget may indeed provide a measure of stimulus to the Canadian economy, the posting of large deficits remained a serious concern for individuals and small business owners. CFIB President Catherine Swift noted that the “number one priority” for small businesses in this budget was signs of stability that will build corporate and consumer confidence. Overall, the CFIB was pleased with raising the small business corporate income tax threshold, targeted reductions in personal income tax, the stabilization of EI rates and capital cost allowance (CCA) measures, but remained apprehensive about the potential precedent in large deficit spending. See the full CFIB reaction online:
www.cfib.ca/en/default.asp?l=E
FRASER INSTITUTE
The Fraser Institute labelled this year’s budget irresponsible, suggesting it was a smorgasbord of special interest spending, predicated on activist economic policies. Especially critical of stimulus spending, Neils Veldhuis – Fraser Institute senior economist – noted that the increase in spending, covering nearly every industry, was merely transferring money from some Canadians to special interest groups. This will not, Velduis suggests, increase economic activity. However, the Institute’s major disappointment concerns the lack of permanent broad-based relief, only $3.8 billion of the $11.9 billion of tax relief being permanent and broad based. Finally the Fraser Institute suggests infrastructure spending – while certainly important and needed for long-term competitiveness – will do little to stimulate growth, since such initiatives are almost never “shovel ready” and those that are aren’t necessarily the ones with the greatest return. Overall Veldhuis calls this budget a “missed opportunity”, only delaying much needed restructuring and broader based relief. Read the Fraser Institute’s 2009 budget analysis online:
www.fraserinstitute.org
IMAGINE CANADA
Imagine Canada expressed disappointment with the federal government’s 2009 budget. Representing Canada’s charities and non-profit organizations, Imagine Canada suggested that the time is critical for government action to support its non-profit sector, which employs a workforce of nearly 2 million full time workers - or 11% of the economically active population – and accounts for 8.5% of Canada’s GDP. Marcel Lauziere, President and CEO of Imagine Canada, described this budget as a “missed opportunity” to make real, substantial investments in Canada’s charities and non-profits, in what will surely be challenging years ahead. Read Imagine Canada’s pre-budget submissions on charities and non-profits and their full budget 2009 commentary at:
www.imaginecanada.ca
INSTITUTE FOR MARRIAGE AND FAMILY
The Institute for Marriage and Family sees improvements in this budget for most families. Low income families will be able to earn more before paying taxes and losing social benefits, and middle income families will see the same type of tax advantages. Dave Quist, Executive Director, noted disappointment that family income splitting was not introduced in this budget.
PRICEWATERHOUSE COOPERS
Big spending, with little relief characterized the 2009 budget according to PricewaterhouseCoopers. Their overview of the federal budget covers the gambit of business and personal tax implications. PricewaterhouseCoopers says that while the budget does little to revise corporate or personal tax rates, it does offer tax assistance to manufacturers and Canadian controlled private corporations, proposing the repeal or review of previously announced international tax measures. Modest tax savings were made available to all personal taxpayers while introducing targeted tax credits to encourage home ownership and renovations. Look online for the full Pricewaterhouse Coopers budget analysis:
www.pwc.com/ca/eng/main/home/index.html
THE CONFERENCE BOARD OF CANADA
The Conference Board of Canada calls big spending the theme of budget 2009, with no surprise given the detailed leaks over the past week. Overall, it supports many of the measures contained within this year’s budget, including emphasis on a construction heavy (close to 50% of the fiscal stimulus) agenda. According to the Conference Board, this budget marks a concerted shift toward bolder, more active fiscal stimulus, measures it suggests are intended to fuel the economy through new spending, tax cuts, or a combination of the two. Despite the risks involved, the Board remains more optimistic than the 2009 budget projections themselves, estimating that the governments combination of tax cuts and stimulus will see a GDP rebound in 2010. Their forecast calls for real GDP to contract 0.5 per cent in 2009, followed by a strong rebound of 3.6 per cent in 2010. It bases these projections on positive growth in key Canadian industries and stronger domestic demand insulating the Canadian economy from turmoil south of the border. Read the Conference Board’s entire report here:
www.conferenceboard.ca
WELLESLEY INSTITUTE
The 2009 Federal Budget has failed to target investments in the most vulnerable segment of the Canadian population. Specifically, the Wellesley Institute suggests five shortcomings in this budget: 1) a gap between $2 billion offered to the precariously housed, versus $5 billion offered to current home owners, 2) a failure of increased EI benefits to help the nearly 6/10 unemployed who cannot receive EI, 3) neglect of the non-profit and charitable sector, 4) stagnation on the expansion and innovation of the health care system, 5) impracticality of infrastructure cost-sharing with cash-strapped municipalities. Read the full Wellesley Institute analysis at:
www.wellesleyinstitute.com