Federal budget provides help for growing businesses

Federal budget provides help for growing businesses

The Business Council of Alberta called it a ‘positive budget,’ in particular in helping with the transition to a green economy

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The federal budget is being viewed as positive for businesses, though there are still a lot of questions to be answered about actual investments.

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The Canadian Federation of Independent Business says the change in small business tax will help businesses grow, rather than serve as a barrier to growth as it does now.

The tax break eligibility for small businesses will be extended from $15 million in taxable capital to $50 million.

The budget lays out plans for phased lower tax rates (nine per cent on the first $500,000 of taxable income) up to $50 million where it will return to 15 per cent.

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“That’s really helpful for those businesses that are looking to become a more medium-sized business,” said Annie Dormuth, Alberta director of provincial affairs for CFIB.

The CFIB, however, called the budget a missed opportunity when it came to helping businesses dig out from the mountain of debt they incurred, including through federal programs, during the pandemic.

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The Business Council of Alberta called it a “positive budget,” in particular in helping with the transition to a green economy.

“I know businesses have been calling for this kind of support to help them get over the hump,” said Mike Holden, chief economist with the council. “These kinds of projects don’t make anybody any kind of money, they’re expensive and there’s no (financial return) on them.”

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He, however, was hoping for better timelines for the delivery of these investments and a path to clearing up the regulatory process.

Of particular concern for Alberta are tax credits for carbon capture and storage (CCUS) infrastructure and investments. This includes 60 per cent for equipment to capture CO2 in direct air capture projects, 50 per cent for all other CCUS projects and 37.5 per cent in equipment for transportation, storage and use.

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The budget also promises $329.4 million over six years, starting in 2022-23, to triple the size of the Agricultural Clean Technology Program, and $469.5 million over six years, starting in 2022-23, to Agriculture and Agri-Food Canada to expand the Agricultural Climate Solutions program’s On-Farm Climate Action Fund.

Finance Minister Chrystia Freeland promised a focus on research and development, and the creation of a $15-billion Canada Growth Fund over five years to help mitigate the risk of investing in new technologies and industries.

Calgary Economic Development CEO Brad Parry was encouraged by the news, but noted it needs to be a concerted effort to maximize the benefits.

“It will take all orders of government working collaboratively with the private sector and post-secondaries to accelerate real-world application of research and development of clean tech that will drive progress in all industries,” he said in an email.

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Deborah Yedlin, president and CEO of the Calgary Chamber of Commerce, was less bullish about the budget, saying the government “was still operating with a COVID mindset.”

She said more details are needed for a number of the programs, especially plans to address the labour shortage, which is hampering jurisdictions around the world.

“They’re not doing what other countries are doing that are targeting specific sectors and bringing people in to fill some pretty specific talent gaps,” said Yedlin.

She is also concerned about the decision to single out banks with a one-time 15 per cent tax on revenues over $1 billion on top of a 1.5 per cent increase to taxes for financial institutions and insurance companies. Yedlin said the move could affect access for the public.

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Trevor Tombe, an economics professor and research fellow at the School of Public Policy at the University of Calgary, said the budget will provide some much needed stability, projecting to a surplus in 2027. He noted high oil and gas revenues are playing an important part in that — accounting for $16 billion in added revenue.

He suggested the budget could help encourage private investment in the economy.

“The most important thing for most businesses is certainty and predictability, and stability in policy,” said Tombe. “If you’re making a multi-year, multibillion-dollar investment, you need to have confidence in the environment that you will be operating in. This budget doesn’t feature any large change in policy.”

[email protected]

Twitter: @JoshAldrich03

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