Canadian business leaders will be watching closely as Finance Minister Chrystia Freeland rises in the House of Commons on Thursday afternoon to deliver the 2022 federal budget.
After two years of the COVID-19 pandemic, marked by revolving lockdowns and supply chain constraints, the bottom-line priorities of the country’s businesses are focused on recovery, with an eye to a sustainable future.
Global News spoke to the heads of some of Canada’s major business groups and rounded up wishlists from others to hear what they’re hoping to see in this week’s budget.
Streamlining economic immigration
Top of mind for a number of business groups who spoke to Global News this week is access to talent in a tight labor market.
Statistics Canada said last month that the country’s unemployment rate dipped back below pre-pandemic levels for the first time in February. Employers keen to grow the size of their workforces in the pandemic recovery instead found themselves stuck with numerous vacant positions left unfilled.
Ben Bergen, president of the Council of Canadian Innovators (CCI), told Global News the number of vacancies in the country’s tech sector stands as high as 200,000.
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Veronique Proulx, senior vice-president with the Canadian Manufacturers and Exporters, puts that industry’s labor shortfall at 80,000 positions.
“We actually have manufacturers who are slowing down production, shutting down some production lines because they can’t find the workers they need,” Proulx tells Global News.
Both Proulx and Bergen say the government’s move earlier this week to streamline the Temporary Foreign Worker Program to get non-residents hired more quickly was a step in the right direction.
The CCI released a talent and skills strategy last week urging the feds to go further, allowing skilled workers to enter the country without a job offer in hand to speed up the immigration process.
Proulx notes that the federal government is leaving economic output on the table if the country’s manufacturing supply chain isn’t running at full steam with an incomplete labor force. CME estimates the cost of supply chain disruptions to the Canadian economy over the past two years at roughly $10 billion.
“We’re asking the government to invest more to be able to streamline the process and reduce delays,” she says.
Debt relief and the cost of business
In addition to a stalled supply chain, another consequence of the COVID-19 pandemic is a sizable debt load for the businesses that had to take on loans to survive the financial hardship.
An August 2021 survey polled from the Canadian Federation of Independent Businesses (CFIB) said 71 per cent of companies had to take on significant debt to get through the pandemic, averaging just under $170,000 per business. That figure is nearly double for the average business in the hospitality sector.
Mark Agnew, senior vice-president of policy at the Canadian Chamber of Commerce (CCC), says the government needs to turn its attention from standing up businesses struggling in the pandemic to make sure their debt obligations don’t constrain the economic recovery.
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“The support program package is winding down for understandable reasons. But that being said, businesses have still accumulated a lot of debt over the course of the last two years,” he says.
Agnew says businesses who took out loans via the Canada Emergency Business Account (CEBA) would benefit from longer time frames to repay the principal debt and forgiveness on interest owed on those amounts.
Small business struggling with debt and revenue in pandemic recovery
The CFIB would also like to see the CEBA loan repayment deadline extended, and the forgivable portion of these loans extended to 50 per cent of the principal amount if paid by the new date, up from the current roughly 33 per cent that can be forgiven.
The top-line concern of 81 per cent of Canadian small businesses is ensuring the cost of doing business does not rise, according to a survey of CFIB members taken shortly after last fall’s federal election.
The independent business lobby group says this should materialize in the budget as measures to reduce, or at minimum not add, additional red tape that would slow pandemic recovery.
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“Businesses continue to struggle with decreased revenue, staffing shortages and major cost increases,” said Corinne Pohlmann, CFIB’s senior vice-president of national affairs, in a statement.
“While optimism is returning as restrictions begin to lift, many businesses are hoping to see concrete measures in the federal budget that will help them deal with the cost of doing business, labor shortages and COVID-related debt.”
Help with the environmental transition
The federal government has set a bar to achieve net-zero carbon emissions by 2050, with the Liberals saying last month they’re now looking to achieve 40-45 percent emissions reductions by 2030.
Agnew says the writing is on the wall for most companies to embrace decarbonization, though the costs associated with such a transition can be daunting.
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The feds have signaled that a tax credit will be coming to adopt technologies such as carbon capture utilization and storage (CCUS), but Agnew says the CCC will be watching closely to see whether these reimbursements are enough to make the investments “viable.”
“Companies are facing a lot of pressure from their investors, their consumers, to be shown that they’re doing the right thing to combat climate change,” he says.
“It’s very expensive and capital intensive to build a CCUS bit of technology or facilities … this is why the federal government investing in it is important.”
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Proulx echoes Agnew’s concerns on making the climate transition sustainable. She says the CME would like to see the Strategic Innovation Fund, which helps fund large-scale projects to reduce emissions, maintained and expanded this year.
But she notes that the SIF is targeted at larger firms, and new sustainability incentives need to be targeted at small- and medium-sized companies.
“We’ve seen it in the past. The more we accelerate the integration of new technologies within manufacturing, the more manufacturers are able to reduce their (greenhouse gas emissions). This will really be a key and we really have to start now,” she says.
Other items on Canadian businesses’ wishlists
- The CFIB wants the Canada Recovery Hiring Program, which helps tourism and hospitality businesses as well as others hardest hit in the pandemic, extended until at least September 2022. Applications for the final period currently close on May 7.
- The CCC would like to see more investment available through the National Trade Corridors Fund, which gives airports, railways and other key supply chain players money to build out critical infrastructure. “It’s a fund that has far more demand than there is funding available to it,” Agnew says.
- In addition to labor pool measures, Bergen says the CCI will be looking for changes to how patents filed through the Scientific Research and Experimental Development system are linked to reduce costs for Canadian companies developing their own intellectual property.
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