Newmarket's business community told local MP Tony Van Bynen they want the federal government to address a wide range of issues to reignite the economy after the COVID1-9 pandemic — everything from reshoring manufacturing to tax credits for gym memberships.
Van Bynen hosted a consultation meeting with the Newmarket Chamber of Commerce today, Feb. 11, to gather suggestions for what should be included in the upcoming federal budget, which he said will be focused on rebuilding a better post-pandemic economy.
Chamber members had no shortage of ideas for the Newmarket-Aurora MP to relay back to his government later this month.
"My deepest wish is that we could have this level of discussion and quality of dialogue during question period in the House of Commons," said Van Bynen after the discussion.
Scale back benefits to get people back to work
Chamber member Michael Smith said he wants to see more qualifiers placed on Canadian Emergency Response Benefit, although that program has ended and has been replaced with more generous unemployment insurance benefits. He believes the program gave too many people the option of not working.
"I have pointed out a couple of examples of part-time kids in high school making $2,000 a month and can't be bothered to go back to work in Tim Hortons, which is owned by local residents," said Smith.
Smith also argued that whatever money is put toward creating more jobs should be focused on private-sector jobs, not the public sector.
Van Bynen said the government had felt it was better to be too generous at the start of the pandemic than risk not providing enough support and causing the economy to "go into a tailspin."
Concern about increased taxes from pandemic spending
Michael Croxon, CEO of Newroads Automotive Group, expressed his concern about how the amount of government spending during the pandemic and whether paying off the debt racked up over the past year will require increased taxes.
Van Bynen said that the cost of servicing the debt is manageable at one per cent of GDP, compared to the six per cent it cost in the 1990s. With that in mind, he said, the government believes focusing on the creation of a growing economy again will be the best move in the long run.
Create a tax credit for capital investments
Matthew Waddington of CPG Aerospace suggested an aggressive tax credit for capital investments would be a good way to help restart the economy.
"A significant portion of businesses are in one of two situations: they are either in survival mode or creating an exit strategy. Both of these situations lead businesses to reevaluate their level of investment (in their own operations). When uncertainty occurs, spending is reduced," said Waddington.
When companies spend less on improvements, other businesses who provide things like new equipment see their revenues fall. Waddington is concerned that this creates a domino effect that makes the problem worse until something is done to convince companies to start investing again. A "very aggressive tax credit" on capital investments, he said, could do help do that.
"Something in the range of 10 to 20 per cent would be a pretty small carrot when what we need is a real kick in the caboose," he said.
"If you need to buy a truck and you can get a 50 per cent tax credit for the next year, then not pushing that purchase off would be the fiscally responsible move."
He also noted this could be a good way to get businesses to purchase more environmentally sustainable equipment, which jives with the government's goal of growing back a greener economy.
Support for green businesses
Pete Basso of Demand Renewables said the federal government could also further that goal by assisting green businesses such as his. He would be interested in having the federal government create a grant program similar to the Green Ontario Fund. This program provided grants and rebates for energy-efficient improvements to homes but was cancelled by the Ford government in 2018.
"We are pushing for some assistance for the green industry to level the playing field because we are operating at a significant disadvantage to the traditional hydro companies," said Basso.
Van Bynen said that the federal Environment Minister has already taken notice of the Newmarket Energy Efficiency Retrofit Program, and it could be a model to follow.
"It has a huge business case, and the Town of Newmarket has been able to define the environmental benefits of that program very clearly," said Van Bynen.
"It's an example of how we can pursue a green economy."
Attract companies to reshore manufacturing
Another idea for a tax credit was pitched by Lynn Ford from the Celestica electronics testing lab in Newmarket. She argued the government needs to provide an incentive for manufacturing companies to bring their operations back to Canada after decades of seeing such operations moved offshore.
Ford said the pandemic has laid bare how a lack of domestic manufacturing has left Canada unprepared to be self-sustainable. She told Van Bynen that a tax credit could be used to convince companies to move back to Canada. She said that particular focus should be on convincing pharmaceutical companies to set up vaccine manufacturing facilities, ideally in small communities.
Simplify the tax code
Chamber member George Puccia argued now was the time to appoint a royal commission to go over the federal tax code and simplify it and help get the government out of the way of business.
"No one likes significant tax changes unless it benefits them directly. But given that the apple cart has already been overturned and possibly thrown off a cliff, what better time would there be to take a better approach," said Puccia.
"I can't think of anything that would work better to incentivize growth than tax simplification."
Tax credits to encourage fitness and education
Karate-Do & Fitness Centre owner Brad Jones asked for help for the fitness industry, which he said has been "gutted" by the pandemic.
"Two-thirds of the industry is gone, permanently. And I am in survival mode myself. If it wasn't for a federal loan and some provincial grants, I wouldn't be able to survive either," said Jones.
The martial arts instructor suggested that the federal government issue tax credits for people who sign up for gym memberships or sports programs. That would help the industry and help get people active again after so long being stuck inside.
John Wager Scholars Education Centre made a similar argument about education and tutoring programs. This past year has had a noticeable impact on the education of the students he sees, and making tutoring more affordable will help get kids back on the right track.
Residents who wish to share their ideas for the federal budget are invited to contact Van Bynen's office, or to fill out a questionnaire at LetsTalkBudget2021.ca. Deadline for feedback is Feb. 19
