Budget Submission 2009
Wednesday, January 07, 2009

Dear Sirs,

In response to your call for input on the 2009 federal budget, we are pleased to make a joint submission on behalf of our Prince Edward Island constituents. Suggestions came from participants of a town hall we held on January 6^th as well as written submissions.

All economic activity begins with primary industries. Only when agriculture, fisheries, and forestry start to rebuild and recover will Canada start moving out of the present economic situation. It is therefore recommended that the Government of Canada:

Provide immediate financial assistance by expanding credit available to the farm sector and agri-food sector through Farm Credit Corporation, Business Development Bank of Canada and Export Development Canada;

Establish a fund for food science, product development, branded market promotion and skills upgrading in the agri-food and fishing industries;

Establish grants and tax incentives to support capital investments and process innovation with a particular focus on food safety and quality.

Establish a food procurement policy that would ensure, when available, Canadian foods are purchased;

Establish a special federal fisheries fund to help finance a fleet rationalization program (i.e. license retirement) in partnership with fleet organizations and provinces for those fleets and areas in serious difficulty. Such a program will assist older and economically disadvantaged harvesters to leave the industry with a certain level of security and dignity while providing more economic security and improved access for those who remain;

Ease access to capital and credit to support individual enterprises and license transfers from those private sector lenders that have already received substantial federal government support. This will encourage new, younger entrants to the fishery, an industry with participants’ average age in the mid-to-late fifties.

Establish a price stabilization fund for fish harvesters confronting sudden reductions in landed prices;

Provide funding support to a national agency to promote seafood marketing, eco-labeling, and Ocean-to-Plate initiatives;

Reduce certain fees and other fishery management costs to help ease the financial burden on harvesters;

Make tax reductions to enterprises on the application of carbon reduction technologies to fishing vessels and equipment;

Increase funding to the Fisheries and Oceans Canada departmental budget to support improved science and research programs, more effective enforcement, and needed improvements to small craft harbours; and

Encourage the provinces to initiate/improve Fisheries Loan Board agencies and programs.

It is also recommended that the Government establish a skills retraining imperative and programs to capture the economic crisis opportunity to support an industry-based transition to new economy sectors from the past traditional primary resource and manufacturing sectors which are at risk, to more green and information-technology sectors.

In regards to the infrastructure and procurement, it is recommended that the Government of Canada: Maintain and expand transfer payments and create a delivery centre (at the federal and each of the provinces public works organizations) that is mandated with capacity, capability and authority to operate in a “crisis management” mode – to mobilize spending for maximum economic impact for short (2009-10), medium (2010-11) and long term (2012 on) targets;

o   Requires supporting overrides but with clear sunset provisions, on certain traditional and time consuming policies, e.g. environmental screening (do 90 day EAs), procurement practices (use “rotational contract awards”), etc. to achieve fast track capabilities;

o   Requires tailored oversight mechanism(s) to maintain integrity and accountability for the economic crisis policy regime (i.e. not at any cost but for the public policy intended);

o   Requires a broad-based board of directors management regime that includes each level of government to focus on priorities and results; and

o   Requires persons capable of operating in a crisis environment and with a can do attitude; and

Commit to critical public works within federal jurisdiction as examples for leadership in achieving fast track results, e.g.

o   Water and sewage treatment facilities on all aboriginal reserves in Canada;

o   Pacific, Ontario (Windsor- Detroit), and Atlantic Canada Gateway trade corridors – improved roads, bridges, ports and customs facilities to enable enhance trade with Asia-Pacific Rim, Mid-West USA, and Europe trade regions.

o   Infrastructure investment should include roads, sewers and basic municipal infrastructure; health and education facilities; mass transit; upgrading our national rail system; affordable housing; energy conservation through building retrofits; renewable energy and transmission; and broadband capacity across Canada with emphasis on rural communities;

Establish a comprehensive nation-wide energy retrofit commercial and residential program to increase energy efficiency as it would provide immediate jobs in the construction industry and substantial lower energy costs today and in the future.

Invest in renewable energy projects such as wind, hydro, tidal and solar to gain energy independence and keep energy investment local.

Implement an energy policy that set the floor price of oil at say $70 or $80 per barrel. The Government would as part of the policy reinvest the levies collected between the floor price and current market price into "green technologies". When the oil price rises above the floor price, market forces will take over and green technologies should be able to compete in the market.

Invest in our educational and research facilities across Canada to ensure our success today and gain new industries for tomorrow.

Allow  companies  to  apply  for  a  one‐time  advance  on  accumulated  non‐capital  tax  losses  in  lieu of  claiming  other  qualified  research  expenses.  The  proposal  would  have  the  following  features:  

o   Election  by  a  company  to  receive  refund  of  accrued  non‐capital  tax  losses  at  current corporate  tax  rate.  

o   Refunds  must  be  reinvested  in  research  &  development  expenses  as  defined  by  Canada Revenue  Agency  over  the  next  two  years.  

o   Company  would  permanently  forgo  the  opportunity  to  claim  those  non‐capital  tax losses  involved  in  the  refund.  

o   Company  would  forgo  claiming  any  SR&ED  tax  credits  if  funded  by  the  refund.  

o   Limited  to  small  and  medium  enterprises  with  revenues  less  than  R&D  expenses  in 2008.  

o   The  advance  will  be  capped  at  the  lesser  of  $20  million  or  twice  a  company’s  annual R&D  expenditure.

Implement  a  capital  gains  exemption  on  all  new  direct  investments  in  the  next  two  years  to  all companies  with  Canadian  headquarters  investing  in  science  &  technology  research  here.  The proposal would have the following features:

o   No immediate cost to the government.  Exemption  from  future  capital  gains  would  be limited  to  investments  made  in  2009  and  2010.  

o   Limited  to  new  direct  investments  into  Canadian  headquartered  companies  conducting research  and  development  in  Canada.  

o   Creates  an  incentive  for  investment  that  waits  for  returns  during  the  long  development  time  of  R&D  companies.  

The Government of Canada needs to be sensitive to the gender equality of actions taken in the economic stimulus and the federal budget. Currently, infrastructure investment benefits males more than women as construction continues to be a male dominated sector. Steps towards incorporating increased “income splitting” in tax policy should be opposed; tax cuts alone will not help all women as 28% of females do not earn enough to pay income taxes; and there should be a focus given to childcare, affordable housing and pay equity.

Develop a national poverty reduction strategy and invest in affordable housing. The Government of Canada should increase low-income supports in all regions, as the situation for many already vulnerable will continue to get worse.

Strengthen partnerships with the arts and culture sector by building on its support for artists and arts organizations through the Canada Council for the Arts.

Facilitating the efforts of Canadian arts and cultural organizations to train the next generation of artists, and expand their audiences and the markets for their work, through the programs of the Department of Canadian Heritage.

Reinvest in programs of support for international cultural diplomacy and market development.

Other recommendations include:

Renew and expand the Cooperative Development Initiative (CDI).

Increase access to Employment Insurance by removing the 2-week waiting period and establish a uniformed Employment Insurance entrance requirement of 360 hours in all regions; benefits based on 60% of earnings over the best 12 weeks; and benefits should last up to 50 weeks.

Boost public pensions, reduce private pensions (ie. RRSPs) and create a national pension guarantee fund.

Increase CPP and OAS payments.

Invest in disease prevention and senior care.

Using a targeted date of three years move toward a guaranteed annual income, (blending Canada Pension, Employment Insurance, Old Age Security, Social Assistance, etc).

Maintain public services and programs, especially in healthcare and education. This is not a time to cut services or public servant jobs.

Create a national pharmacare/catastrophic drug plan.

Renegotiate NAFTA.

Reinstate the Visitor GST Rebate Program.

Change GST eligibility from age 19 to 18 and  raise the threshold so more citizens could receive the GST rebate. This could be back-dated to January 08, allowing Canada Revenue Agency to issue cheques for last year, putting cash into the hands of citizens immediately.

Remove the 3% above Gross income on Medical expenses.

Provide a percentage rebate on medical expenses for low-income individuals and families, similar to the GST rebate.

Continue and increase funding to the Canadian Tourism Commission as well as vital economic development organizations such as ACOA.

Eliminate the capital gains tax on gifts of private company shares and real estate to assist charities.

Allow business owners to access their Personal RRSP accounts to invest into their businesses.  The same process as the Home Buyers Program where you have a repayment term of 10-15 years.  This will free up a lot of cash for Business owners to invest into their businesses and the economy.

Allow retirees to draw from their RRSPs at reduced taxation rates.

Have banks reduce interest rates to improve access to credit.

As you can appreciate the aforementioned suggestions have been summarized in short. Should you require further details please do not hesitate to contact us. We thank you for your time and trust these suggestions will be given every consideration.