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November 14, 2005
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Fiscal Update: Business Has Large Tax, Debt, and Trade Agenda for Finance Minister - Hints of New Ambivalence about PSE Spending
A BDO Dunwoody/Chamber Weekly CEO/Business Leader Poll by COMPAS in the Financial Post
With Finance Minister Ralph Goodale set to release a Fiscal Update Monday November 14th unless blocked by the Opposition, the FP/COMPAS business panel was asked to provide an agenda of what should be in the update. Their expectations for an update are immense.

Respondents embrace almost all 20 items presented to them for consideration. Stopping federal spending growth elicited almost unanimous approbation. The single most supported initiative would be to "evaluate programs every three years to identify where spending can be reduced or eliminated" - embraced unequivocally by 97% of respondents.
Other highly favoured Fiscal Update commitments would be to
  • Reduce the general corporate income tax rate to 20% in 2006 and by one percentage point in each of the following three years
  • Greatly reduce the effective tax on low income families from 60% or higher that they pay when they are able to enter or re-enter the workforce
  • Cut debt by allocating each year’s federal surplus to debt reduction
  • Reduce inter-provincial trade barriers
  • Improve infra-structure at Canada-U.S. borders to improve trade flow
  • Speed up recognition of the foreign credentials of immigrants
  • Operate EI as an insurance program.

In a departure from past patterns, business panellists are expressing slight ambivalence about post-secondary funding. They do wish governments to harmonize student loan programs, increase transfers to universities, and introduce student vouchers "so that universities receive more revenue while becoming more sensitive to the needs of their student-customers." But respondents express even more support for objective data on university funding. They want a commitment in the update that "federal and Provincial governments [will] make more transparent the data on how they invest in post secondary education."

The 20 possible economic update points presented to respondents reflect well the panel’s perspectives with three exceptions. Opinion was volunterred that (a) an update was beside the point given that the Liberals had lost a moral right to govern, (b) economic issues should take second place to security initiatives in an era of terrorism, and (c) health privatization was an urgent priority. "With what is happening in national and international arenas," observed one respondent, "I would have expected emergency preparedness to be considered as a priority." "Health care is a significant area requiring more effort," observed another respondent. "Privatization is the right answer to manage this more efficiently, but the federal government needs a program requiring funding for low income special needs groups [seniors/disabled] that maintains their rights in the privatization queue." "None of this matters very much," volunteered another. "The Liberals have no moral authority to govern. Nothing they promise or say can be believed."
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