Atlantic Chamber members want tax reform coming out of pandemic
Posted on May 27, 2021 | Ashley Fitzpatrick | 0 Comments
It’s a common suggestion that businesses are singularly focused on seeing a reduction in their corporate taxes but calls for comprehensive tax reform – at the federal and now provincial levels – are given greater weight by many, in the look to the post-pandemic future.
There was a taste of the idea in the responses to the annual Atlantic Chamber of Commerce member polling, meant to help the Chamber establish policies and its priorities for the coming year.
The regional not-for-profit organization is comprised of chambers of commerce, boards of trade and 25 “corporate partners,” providing reach to more than 16,000 businesses in Atlantic Canada. And first off, the results from the February-March 2021 polling by Narrative Research showed health and pandemic recovery not just top of mind, but all-consuming right now.
“It puts all of the other policy issues aside to an extent,” said Brandon Ellis, the senior manager responsible for policy at the Atlantic Chamber of Commerce.
For example, when asked: “In your opinion, what is the single most pressing policy issue at the federal level?” A total of 61% of the responses selected “pandemic recovery,” with all other traditional options – support for small and medium-sized enterprises, access to qualified workers, or reducing red tape, as examples – each mentioned in fewer than 10% of responses.
But the annual poll has a question specifically on taxation as a provincial policy issue. And when asked about the “most desirable outcome” in terms of any changes to taxation, 54% of the responses from the 57 Atlantic Chamber members completing the survey prioritized “comprehensive review of taxes for individuals, small businesses and corporations.” The result was well above the 23% for prioritizing “reduced corporate tax rates to stimulate business investment.”
Of perhaps greater interest, the idea of comprehensive tax review is showing an apparent increase in support through 2018, 2019 and 2021, while the idea of a tax break increased in support from 2018 to 2019 but dropped off in 2021 results.
The Atlantic Chamber of Commerce recently commissioned a poll of its 16,000+ members, conducted by Narrative Research, to help the Chamber set policy priorities for the coming year. Click here for full poll results.
You may chaulk it up to the pandemic and the stress of business owners navigating waves of new government programs and spending, but the Atlantic Chamber of Commerce’s more recently released policy paper, “2021 Policy Pillars for Recovery,” keeps tax reform front and centre, calling for ways to “simplify compliance, promote equity and set globally competitive tax rates.”
Ellis said broad tax reform at the federal level has already long been a staple issue, pressed by the Atlantic Chamber for decades alongside the Canadian Chamber of Commerce, issuing calls for a Royal Commission on taxation.
“It was 1967 the last time we saw a federal tax review,” he said, adding that by the 1980s the federal Income Tax Act was becoming a “large, monolithic, complex” document. “Compared to today, it was a model of clarity and simplicity in the 1980s. It’s become worse since then,” he said.
“One of the consistent things I was hearing from the different provincial advisory committees and the board policy committee, and some of my colleagues generally as well, was the need to have a more friendly tax environment for business and for the private sector for investment in Atlantic Canada,” he said.
Reducing corporate taxes is not off the table as an issue of course, and Ellis said a province where it would be particularly challenging at this point (specifically Newfoundland and Labrador as the example) should be looking at less-costly red tape reduction strategies and essentially doing what can be done to energize the private sector and capture new investment as the pandemic wanes.
An essential message coming from the chambers is while businesses may see rapid bounce-back in sales and other positive indicators, there will still be a debt issue to deal with in the private sector as well as with governments, requiring some careful navigating.
“The last time we saw something this significant would have been in 2008-2009 and in my analysis we are going to come out of this with a debt overhang (…) that is quite significantly larger than anything we saw in 2008-2009,” Ellis said, warning the region will not be out of the woods for some time yet.
Apart from specifically pandemic recovery and tax reform, “support for SMEs” and “improve access to qualified workers” again ranked as Atlantic Chamber high-priorities. •
Comments are moderated to ensure thoughtful and respectful conversations. First and last names will appear with each submission; anonymous comments and pseudonyms will not be permitted.
By submitting a comment, you accept that Atlantic Business Magazine has the right to reproduce and publish that comment in whole or in part, in any manner it chooses. Publication of a comment does not constitute endorsement of that comment. We reserve the right to close comments at any time.