The federal government unveiled its 2023 Budget yesterday, offering mixed signals to the business community. The budget comes at a difficult time for economic forecasters. The pandemic is still affecting employers and businesses and global supply chains continue to face stress due to the Russian government's war on Ukraine. With stubbornly high inflation, many people are struggling with affordability and uncertainty about how they can grow their business.
Yesterday's budget committed the government to about $43 billion in new spending over six years, said Canadian Chamber Chief Economist Stephen Tapp.
"While there are many ways to break down these moves, I 'follow the money' to identify five big-ticket categories," Tapp said, pointing to $31 billion for health care, $16 billion for tax credits aimed at spurring investment in a clean economy, and about $25 billion for benefit cheques and other new spending. Tapp also noted that new taxes to high-earners will raise about $14 billion while spending cuts will save another $13 billion.
The Greater Victoria Chamber of Commerce has advocated for infrastructure projects in our region, including modernization of Belleville Terminal. It's not clear yet if there is money in this budget for that.
"On the one hand, The Chamber is a huge proponent of shifting to a green economy and the opportunities that represents for our members. This budget will offer encouragement to chamber members at the leading edge of this shift," Chamber CEO Bruce Williams said, adding that another positive highlight was a promise to lower credit card transaction fees for small businesses. The government says 90% of businesses that take credit cards will see fees go down by 27%.
Still to be determined is how government spending $2.5 billion on relief cheques for lower-income Canadians will affect inflation.
"On the one hand, businesses will be happy customers have a little more money to spend but will it mean costs keep going up? Time will tell," Williams said.
"The rising cost of doing business is a major concern. Food prices are up, and life is getting more expensive for everyone. Inflation is a problem and higher interest rates have increased the cost of borrowing money, which reduces business investment."