On November 21, the Government of Canada released its 2018 Fall Economic Statement entitled “Investing in Middle Class Jobs”, which provides an update on the government’s finances and announces commitments to improve Canada’s competitiveness.
The government is projecting steady, moderate growth in Canada’s economy, with real GDP forecasted to rise by 2 percent in 2018. The Fall Economic Statement forecasts a deficit of $18.1 billion in 2018-19, down by $0.9 billion from the previous year. Growth is expected to be more modest over the next four years due to limited economic capacity, higher interest rates, and slowing US growth.
REGULATORY COMPETITIVENESS
The government announced plans to:
- Explore making competitiveness a permanent part of regulator mandates
- Introduce an annual modernization bill to keep regulations up-to-date
- Establish a dedicated External Advisory Committee on Regulatory Competitiveness
- Launch a Centre for Regulatory Innovation
- Enhance Government’s capacity to develop and implement effective regulations
- Take immediate action in response to business regulatory recommendations
- Work together with provincial and territorial partners to accelerate action to remove regulatory barriers in four areas:
- Transporting goods between provinces and territories,
- Harmonizing food regulations and inspection rules,
- Aligning regulations in the construction sector
- Facilitating greater trade in alcohol between provinces and territories
TAX COMPETITIVENESS
The government announced plans to:
- Allow businesses to immediately write off the full cost of machinery and equipment used for the manufacturing and processing of goods
- Allow businesses to immediately write off the full cost of specified clean energy equipment
- Create an Accelerated Investment Incentive, which will allow businesses of all sizes and in all sectors of the economy to write off a larger share of the cost of newly acquired assets in the year the investment is made
FISCAL COMPETITIVENESS
- The federal deficit is projected to decline from $19.6 billion in 2019-20 to $11.4 billion by 2023-24.
- The federal debt-to-GDP ratio is expected to continuously decline and reach 28.5 per cent in 2023-24.
TRADE COMPETITIVENESS
The government has announced plans to:
- Establish a continuous call for proposals for the National Trade Corridors Fund backed by an accelerated investment of $773.9 million over five years
- Providing funding of $7 million over five years to Canadian SMEs to help them explore new export opportunities
- Provide funding of $10 million over three years for export readiness and export capacity building initiatives for through local organizations, including chambers of commerce
OTHER ISSUES
The government has announced plans to:
- Provide a further $800 million over five years to the Strategic Innovation Fund, including $100 million that will focus on providing support to the forestry sector
- Creating a Social Finance Fund that gives charitable, non-profit and social purpose organizations access to new financing, and connects them with nongovernment investors
- Advance pay equity by ensuring that women and men in federally regulated sectors receive equal pay for work of equal value
Click here for further analysis of the announcements
Courtesy of the Canadian Chamber of Commerce
