Advocacy Update: March 2, 2020
OCC releases 2020 Economic Report
On February 26, 2020, the Ontario Chamber of Commerce’s (OCC) fourth annual Ontario Economic Report (OER) reveals opportunities where both business and government can focus to create an environment more conducive to small business success.
For 2020, the Small Business Friendliness Indicator (SBFI) score is -9, (on a scale of 100 to -100) indicating that the business environment poses some challenges for firms with fewer than 99 employees. However, investments in online services and support for regulatory compliance could improve that.
Other highlights from the Ontario Economic Report include:
• The confidence gap, which measures the difference between business’ confidence in themselves and in Ontario’s economic outlook, widened in 2020 to near historical levels. Although organizational confidence remains high, business confidence in the broader economy dropped seven percentage points in 2020, explained in part by lowered growth expectations nationally and globally. Beyond this, challenges related to the costs of doing business, the high cost of living, and the province’s debt continue to be top of mind for OCC members
• Infrastructure investment, such as transportation and broadband internet, topped the list of business priorities for government, followed by reducing regulatory burdens, lowering the cost of living, and reforming business taxes.
• Challenges related to accessing financial capital, attracting and retaining talent and burdensome regulations continue to compromise the ability of many of Ontario’s community to compete effectively with other jurisdictions.
• Despite these challenges, Ontario’s principal economic indicators remain sound, albeit subdued, heading into 2020, but economic growth is expected to vary greatly across the province. The forecasts show employment and population growth in the Greater Golden Horseshoe and Ottawa surpassing other parts of Ontario, reinforcing a decade-long trend of imbalanced economic growth across the province.
Federal carbon pricing law unconstitutional, Alberta Court of Appeal rules
The federal government’s carbon tax has been ruled unconstitutional by the Court of Appeal of Alberta, on the grounds that it intrudes on provincial jurisdiction. The 4-1 decision, released last week, rejects Ottawa’s argument that regulation of greenhouse gas emissions is an issue of national concern, citing the division of powers in the constitution that gives the provinces responsibility for non-renewable resources. While the Alberta Court of Appeal ruling found the federal legislation to be unconstitutional, it’s not clear the federal government is obligated to suspend the tax pending a Supreme Court decision.
The Alberta Court of Appeal is the first provincial appeal court to rule against the legislation. Appeal courts in Saskatchewan and Ontario upheld the law in split decisions.
2020 Alberta Budget
Finance Minister Travis Toews tabled the 2020 budget. The government is forecasting $49.98 billion in revenue against $56.04 billion in expenses.
• Personal income tax revenue: $12.57 billion, up 6.3 per cent from prior year
• Corporate income tax revenue: $4.54 billion, up 6.9 per cent
• Resource revenue: $5.09 billion, down 24 per cent
• Investment income: $2.63 billion, down 25 per cent
• GDP forecasted to grow 2.5 per cent, up from 0.3 per cent last year
• Price of oil projected at $58 USD a barrel (WTI)
Alberta’s deficit will decrease by $200 million this year, bringing it to $6.8 billion. Projected total debt is expected to climb to nearly $88 billion by 2023. However, that is down from the $93 billion that was projected in the fall.
Alberta’s estimated revenue for the 2020-21 fiscal year will essentially hold steady at 2019-20 levels, before growing by about 7.8 per cent over each of the next two years, eventually climbing to $58 billion by 2022-23.
Those projections are driven in part by an anticipated 38 per cent increase in energy royalties as both oil production and pipeline capacity expand.
Income taxes are also expected to improve with the overall economy; the UCP government estimates 2.5 per cent GDP growth after an increase of just 0.3 per cent in 2019. As the province continues to advocate for a “fair deal” from its federal counterparts, it believes transfers from Ottawa will help lift the Alberta economy.
Mark your calendars – CFA Ontario Advocacy Day – November 2, 2020
The CFA’s 2020 advocacy day will be held on Monday November 2, 2020 at the Ontario Legislature at Queen’s Park.
More details will follow in the coming months about the day and how to register to join us to speak with your elected representatives.
Corona disease (COVID-19): Weekly Update
The Public Health Agency of Canada (PHAC) has assessed the public health risk associated with COVID-19 as low for Canada. Public health risk is continually reassessed as new information becomes available.
The risk to Canadian travellers abroad is generally low but will vary depending on the destination. The Public Health Agency of Canada is closely monitoring the spread of COVID-19 in other countries. Please consult the destination page on travel.gc.ca for the latest travel advice.