Federal Budget Offers Opportunities and Challenges for Saskatchewan Businesses
REGINA, SK - The Saskatchewan Chamber of Commerce is pleased to see that the 2023 federal budget includes tax incentives to help level the playing field for businesses competing with the US Inflation Reduction Act, and that it has announced plans to establish a Transportation Supply Chain Office and the development of a long-term roadmap for Canada's transportation infrastructure.
“Western Canada is positioned to become a global powerhouse as the world struggles to address the growing food and energy insecurity challenges of the future, but important to our ability to supply the world with food and fuel, is access to ports. This means investment in infrastructure to expand access to Canada’s port system is critical imperative for Saskatchewan,” said Saskatchewan Chamber of Commerce CEO Prabha Ramaswamy.
Ramaswamy said Saskatchewan businesses will benefit from the up to 27% reduction in credit card interchange fees paid to credit card issuers, and she said Saskatchewan businesses were also pleased to see the federal budget held the line on taxes, ensuring no new personal or corporate tax hikes in the budget.
However, the Chamber is deeply concerned about the cumulative debt, debt to GDP and the enormous discrepancy in deficit projections between the federal government’s 2022 Fall Economic Statement and the 2023 Budget.
Ramaswamy points out that Canada will pay $44.9B this year just in interest payments on the country’s debt.
“That’s money that is coming from the taxes paid by all Canadians, and we’re getting nothing for it. We are very concerned that the federal government’s plan to reach a surplus has disappeared,” she said.
While the budget’s various new tax credits to encourage the transition to a clean economy offer potential opportunities for Saskatchewan businesses, the ability to access those opportunities will be dependent on the conditions associated with these tax credits. The Chamber is concerned that labour and carbon target requirements associated with these new programs will reduce access for many.
The Chamber had been looking for the federal government to add enhanced oil recovery projects into those projects eligible for investment tax credits, but that addition was not included in the budget.
“Enhanced oil Recovery projects play a critical role in carbon sequestration. In fact more than 40 million tonnes of CO2 has been sequestered by enhanced oil recovery projects in the province over the past 25 years. We were disappointed this was not addressed in the 2023 federal budget,” said Ramaswamy.
Ramaswamy said the Chamber will continue to advocate for a change to the restrictions around investment tax credits to allow this important environmental initiative to receive tax investment support.
Ramaswamy advises that Saskatchewan businesses are cautiously hopeful that the new clean economy tax credits, and the investments in a transportation supply chain office and a long-term roadmap for Canada's transportation infrastructure will have positive benefits for Saskatchewan businesses, but she believes that whether these federal announcements actually benefit Saskatchewan businesses, won’t be known for some time to come.
The Saskatchewan Chamber of Commerce is the Voice of Saskatchewan Business and represents the interests of over 10,000 individual businesses, industry associations, and local chambers across the province through its chamber network. For more information go to saskchamber.com or @SaskChamber on Facebook, Twitter, Instagram, and LinkedIn.