Canadian Business Group Wants Lower Taxes From Government

by Mike Godfrey, Tax-News.com, New York

26 September 2002

The Canadian Chamber of Commerce said in a policy statement issued this week that the federal government lacks budgetary restraint and wants it to return to the tax-cutting and debt reduction policies espoused by former Finance Minister Paul Martin.

The Chamber fears that Prime Minister Jean Chretien, who is not planning to stand for re-election, is likely to favour spending programmes in the upcoming Speech From The Throne.

"There is a very strong concern that, given the current leadership circumstances, the Government will go forward without the kinds of fiscal anchors that we feel are really important," said Nancy Hughes Anthony, president and chief executive of the Canadian Chamber of Commerce. "We continue to advocate for these anchors so there is a discipline on spending."

The Chamber's agenda calls for the elimination of taxes on business capital, a 1% across-the-board cut in income tax rates, a 3% cap on budgetary spending and staged reductions in employment insurance premiums to $1.80 per $100 of insurable earnings for employees by 2004 from the current premium rate of $2.20 per $100 of insurable earnings.

Ms. Hughes Anthony said federal spending has risen annually at a rate of 7 % during the past two years. "If Canada is indeed to become one of the most innovative countries in the world by 2010, it is urgent for Canadians and the government of Canada to radically rethink what we need from our federal government in terms of programs and policies," the chamber said in its policy statement.

Overall, the chamber said, the tax burden on Canadians is still too high in relation to levels in the US. "The overall tax burden in Canada - revenues from all levels of government as a share of GDP - remains substantially higher than in the U.S. [44.3% and 31.6% respectively]," the policy statement said.

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