The federal government’s proposed budget has met mixed reactions from business executives as some see it as a missed opportunity while others see it as transformative for the economy.
Finance Minister François-Philippe Champagne introduced Budget 2025: Canada Strong on Tuesday. It includes tax changes to attract investment for major infrastructure projects.
Benjamin Bergen, president of the Council of Canadian Investors, told BNN Bloomberg the budget is a significant step towards building trust with innovators.
“This budget is predominantly an inputs budget, where we’re seeing the government willing to commit billions of dollars for things like dual purpose defence technology; lots of what could potentially become investments. Benjamin Bergen, president of the Council of Canadian Investors told BNN Bloomberg in a Wednesday interview.
“But ultimately, we’ve got to figure out what are the mechanisms we’re going to use to capture wealth.”
The government tabled the budget to drive domestic economic growth away from the United States.
Ottawa has been seeking trade partnerships from other countries, but Bergen would like to see more emphasis on Canadian contractors buying from each other, stressing the need to transform government inputs into domestic prosperity and sovereignty.
“How do we turn those dollars on expenditures like dual purpose defence technology into company creators by not just buying from foreign multinationals but also buying from our own domestic players?” said Bergen.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business (CFIB), critiqued the budget saying it lacks transformational measures to support small businesses.
“It’s not that there weren’t some positive measures in the budget, there certainly were,” Kelly told BNN Bloomberg in a Wednesday interview.
“But in terms of reaching to the transformational part of the intention, I’m not sure we’re there. We were looking for something much bigger, a much bigger incentive for businesses to grow at this time, when there’s just so much choking level of uncertainty in the economy right now and that didn’t happen.”
He said he is happy about major projects for big corporations getting off the ground but said he is disappointed over the lack of corporate income tax cuts, payroll tax relief and union-free policies for small firms.
“Based on the hype that the government provided about this being the big transformation to our economy, if you’re going to do that, you need to count on small businesses as a huge part of that,” said Kelly.
Jamie Golombek, CIBC director of Tax and Estate planning said notable tax changes include no alterations to personal tax rates, a fix for non-refundable credit issues, and the elimination of luxury and unused housing taxes.
He said the Registered Retirement Income Fund (RIFF) minimum withdrawal age was not reduced, despite pre-election promises, which could affect retirement planning.
“Maybe we change the age in which seniors are forced to withdraw money from 71 to maybe 73,” said Golombek. “Maybe we reduce the factors, because the problem that exists right now is that you’ve got seniors that are relying on that RIFF to sustain them through longevity, and they’re being forced to take out money and pay tax before they actually need to spend that money.”
Canadians at 71 years of age must convert a Registered Retirement Savings Plan (RRSP) to a Registered Retirement Income Fund (RRIF).
The federal government proposed a temporary 25 per cent reduction in the RRIF withdrawal for one year during their pre-election campaign.
