Canadian Chamber of Commerce

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The Tax Burden on Canadians

Recently released figures show that in 2004, the average Canadian family (i.e. families consisting of two or more people) paid:

	$12,300 in income taxes. Personal income taxes represented about one-third of the total tax bill of Canadians.
	Approximately $7,800 in CPP, EI, and health taxes (the latter being applicable to residents of British Columbia, Alberta, Ontario, and Quebec through direct premiums or payroll taxes).
	Approximately $2,800 in property taxes.
	An estimated $6,000 in sales taxes, or approximately 16% of the total average tax bill. (Sales taxes are second only to income taxes as the single largest government levy.)
	Profit taxes (which are not visible and are indirect taxes) amounting to approximately $3,700. These include liquor, tobacco, and amusement taxes (which together totaled $2,400); automobile and gas taxes (which together totaled a little over $1,000); and $284 in import duties.

In total, the average Canadian family faced a tax bill of $36,782 in 2004 representing 48.8% of income or nearly half of total family income.

Given the sheer magnitude of what Canadian families pay in taxes, members will understand why the Canadian Chamber of Commerce consistently lobbies the federal government to lower the tax burden on individuals as well as corporations. And why, now more than ever, Canadians have a right to demand that accountability from our politicians and governments.

For more information on this item, contact Tina Kremmidas, Assistant Vice President, & Chief Economist, (416) 868-6415, x222, tkremmidas@chamber.ca.

Put personal income tax cuts back on the agenda - Canadian Chamber

QUEBEC, QUEBEC -- Sept. 15, 2003 --After almost three years of frozen personal income tax rates, the federal government must again focus on Canada’s income tax system to make it the most competitive in the world, today announced the Canadian Chamber of Commerce. The announcement was made in a statement on Canada’s fiscal policies at the Canadian Chamber Annual General Meeting in Québec.

“Canada remains behind our major international competitor, the United States in terms of personal income tax rates and the overall tax burden,” stated Gerry Protti, volunteer Chair of the Board of Directors of the Canadian Chamber of Commerce. “It is time for tax relief for all taxpayers, regardless of income.”

In its statement, the Canadian Chamber notes that for many low- and modest-income families, the effective marginal tax rate is higher than 60 per cent and higher than the rate facing Canada's top income earners as a result of clawbacks of multiple benefits.

The Canadian Chamber also stated that the top marginal personal income tax rate in Canada averages 45.4 per cent (federal/provincial combined) whereas in the U.S. it is 38.2 per cent (on a weighted average basis). Moreover, Canada’s top marginal tax rate kicks in at a much lower level of income than the top marginal rate in the United States.

“The federal government should raise the threshold at which the top federal marginal personal income tax rate kicks in to $150,000 from the current $104,649,” stated Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce. “By making our tax rates more competitive, Canada can attract and retain more high-tech skilled workers, upper management, entrepreneurs and professionals.”

Substantial tax relief could be offered over time if the federal government were to create sufficient fiscal room by keeping program spending increases to 3 per cent per annum (to account for inflation and population growth). The government can achieve this by reallocating spending from lower priority to higher priority programs (as the government itself said it would begin do this year) and by instilling greater efficiency in the delivery of public services.

“Large federal budget surpluses – which really represent over-taxation – in recent years have increased the temptation to spend without good planning. Unfortunately, the temptation was not resisted,” added Mr. Protti.

“There should be a thorough review of all programs this year and at least every three years to determine where the payoffs are the greatest and to identify areas where spending can be reduced or eliminated,” continued Ms. Hughes Anthony.

The Canadian Chamber statement also called for any unallocated surplus arising at year-end to be allocated to debt reduction.

The Canadian Chamber released its statement on Canada’s fiscal policies to emphasize the competitive challenge that Canada faces internationally in attracting and retaining jobs, businesses and capital investment.
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Contact: Robin Walsh, cell (613) 715-1860.

Download the Canadian Chamber's fiscal statement. (Microsoft Word document).

Canadian Industry Program for Energy Conservation

From the Canadian Chamber of Commerce 2002

For more than 25 years, the Canadian Industry Program for Energy Conservation (CIPEC) has been helping Canadian industry boost its bottom line by using energy more efficiently. It is a unique partnership between industry and government that offers a number of services to help each of Canada's industrial sectors develop energy efficiency goals and action plans. Its mission is to promote effective voluntary action in Canadian industry to reduce energy use per unit of production, thereby improving economic performance and helping Canada meet its climate change objectives through reduced greenhouse gas emissions.

CIPEC is coordinated by the Office of Energy Efficiency within Natural Resources Canada (http://www.oee.nrcan.gc.ca/cipec/). The program is a network of 43 trade associations that represent more than 5000 companies and more than 95 percent of secondary industrial energy demand in Canada. CIPEC's reach is continually spreading — as of January 2002, CIPEC had 25 task forces, representing a broad spectrum of enterprises in all of Canada's industrial sectors CIPEC industries are making a positive contribution towards Canada’s efforts to achieve greater energy efficiency and reduce greenhouse gas (GHG) emissions. Between 1990 and 2000, these industries achieved an average annual aggregate energy intensity improvement of 2.4 percent. This represents an energy savings that is equivalent to 95% of Canada’s residential heating demand in 2000 and contributed significantly to the estimated $1.8 billion in fuel costs saved by Canadian industry through effective energy management in 2000.

Energy-related GHG emissions have essentially stabilized at 1990 levels for the period 1990-2000. Had there been no energy intensity improvement between 1990 and 2000, Canada’s GHG emissions in 2000 would have been 27 percent higher.

Some of the activities of CIPEC include:

	encourages the full involvement of Canada's industries and raises awareness of energy efficiency in several ways.
	regularly holds meetings of its 25 sector task forces to promote networking and to exchange energy efficiency information and technology.
	holds energy forums to enable sectors to share ideas and information.
	supports the "Dollars to $ense" series of three energy management workshops sponsored by Natural Resources Canada's (NRCan's) Office of Energy Efficiency (OEE).
	supports leadership teams that strive to expand its members' participation.
	publishes communications products to promote the energy efficiency achievements of its members.
	participates in energy efficiency benchmarking and other activities of NRCan's OEE.

The Canadian Chamber of Commerce has and will continue to promote this program with its membership and encourage its members to participate in the appropriate task force for their industry sector. The Canadian Chamber considers this program as a key component of Canada greenhouse gas emissions reduction strategy which is called for under the United Nations Framework Convention on Climate Change.

Recommendation

That the federal government continue to support and promote the Canadian Industry Program for Energy Conservation.

Bank of Canada lowers target interest rate

news@chamber.ca July 16, 2003

Bank of Canada lowers target for the overnight rate by 1/4 percentage point to 3 per cent
Earlier this week, the Bank of Canada announced that it is lowering its target for the overnight rate by one-quarter of one percentage point to 3 per cent. The operating band for the overnight rate was correspondingly lowered, and the Bank Rate is now 3 ¼ per cent.

In recent months, there have been a number of unanticipated developments that bear on the outlook for inflation and economic activity in Canada. Both inflation and inflation expectations have declined more rapidly than the Bank had expected. Near-term domestic economic activity has been undercut by the effects of SARS and an isolated case of Bovine Spongiform Encephalopathy (BSE) in Canada. Foreign demand for Canadian products has also been weaker than earlier anticipated. In addition, the rapid and sizable appreciation of the Canadian dollar against the U.S. currency will tend to have a dampening effect on the demand for tradable Canadian goods and services.

In this context, inflation pressures have eased and more economic slack is opening up in Canada than was previously projected. This week’s interest rate reduction will provide support for domestic demand growth, and consequently for levels of aggregate demand consistent with keeping inflation on a track to meet the 2 per cent target over the medium term.

Looking ahead, the Bank still expects that growth in the Canadian economy will strengthen towards the end of 2003 and through 2004, underpinned by domestic demand, by the favourable conditions in capital markets, and by the anticipated rebound in the U.S. economy. An elaboration of the Bank's views on the economy and the outlook for inflation will be provided in the Monetary Policy Report Update, to be released on July 17th.

The Bank of Canada's next scheduled date for announcing the overnight rate target is September 3rd.

For further information, contact Tina Kremmidas, Senior Economist, (416) 868-6415, x222, tkremmidas@chamber.ca.

Chamber challenges Liberal leadership candidates on business and economic policies

OTTAWA -- June 6, 2003 --Contenders for the Liberal leadership need to focus more on economic and fiscal policies to make Canada more competitive internationally and ensure Canada’s long-term economic prosperity, stated the Canadian Chamber of Commerce in an interim report card of the candidates’ policy positions released today.

“It is clear from this report card that each of the candidates has significant room for improvement in how they are proposing to enhance Canada’s economic competitiveness,” said Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce. “By grading their policies, we want to encourage each of the candidates to present a strong vision on how they would help improve Canada’s economy by addressing the major issues facing business in Canada.”

With two leadership debates remaining, the Canadian Chamber issued its report card on the candidates’ policies to date. The report card graded the candidates on the extent to which their policy commitments were consistent with the priorities of the Canadian Chamber in five key policy areas: fiscal, health care, climate change, innovation and Canada-U.S. trade.

None of the candidates received overall high marks although John Manley scored highest on Canada-US issues and Paul Martin received the best mark for fiscal policies. All three candidates were evenly scored on innovation and productivity policies and all were poorly graded on how they would approach climate change issues. Sheila Copps received the lowest mark in health care reform.

In addition to encouraging the candidates to articulate better economic policies, the Canadian Chamber issued the interim report card to inform its membership and all Canadians about the candidates’ policies to date. The Canadian Chamber will continue to track the leadership candidates and their policies and will issue follow-up report cards.

The Canadian Chamber of Commerce is Canada’s largest and most representative business association. It speaks for 170,000 members in over 350 local chambers of commerce.

For more information contact: Robin Walsh, (613) 238-4000 ext. 231 / cell (613) 715-1860. View the report card.

News Release May 8, 2003

Canadian foreign policy in need of renewal with focus on US, international trade and military – Canadian Chamber

OTTAWA -- May 8, 2003 --Canada’s foreign policy must be reshaped to reflect emerging trade and security priorities if Canada is to remain a strong participant in global affairs, and it must better manage its relationship with the United States, stated the Canadian Chamber of Commerce in its report on foreign policy released today. The report, A Time for Choices, Setting a Foreign Policy Course for Canada, summarizes the results of recent business expert roundtables with members of the Canadian Chamber.

“Current Canadian foreign policy inadequately addresses the needs of Canadian business,” stated Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce. “Over the past decade, Canada’s influence in the world has diminished, leaving our economy and international trade vulnerable to global forces.”

In its report, the Canadian Chamber outlined several key issues for reshaping Canada’s foreign policy. These include:

	Make the Canada-US relationship the most important element of Canadian foreign policy.
	Place trade and economic policy at the heart of foreign policy.
	Link foreign policy with domestic policies such as fiscal, transportation and interprovincial trade.
	Strengthen Canada’s military capacity and strategically focus that capacity.

“We must recognize that our primary international relationship is with the United States, and we should devote more resources to managing that relationship,” continued Ms. Hughes Anthony. “Not only do we need to address the trouble spots in the Canada-US relationship, but we should be looking at ways of expanding our trade and streamlining our regulations with the US.”

“Since Canada relies so heavily on trade, economic policy should be paramount in any foreign policy decisions,” added Ms. Hughes Anthony. “Trade should be the dominant feature of our foreign policy, the lens through which we view the world.”

The Canadian Chamber report outlined how Canada’s foreign policy role and reputation is compromised in various areas, such as a well-functioning and adequately resourced military. “Canada’s international reputation is in jeopardy because we have continually eroded the resources necessary to make substantive contributions in such areas as military capacity and development assistance,” added Ms. Hughes Anthony. “Canada’s reputation reflects our past contributions and capabilities, not today’s reality.”

The Canadian Chamber of Commerce is Canada’s largest and most representative business association. It speaks for 170,000 members in over 350 local chambers of commerce.

news@chamber.ca March 12, 2003

Canadian Chamber of Commerce Hosts Event on Immigration

Last Friday, the Canadian Chamber of Commerce and the International Trade Club of Toronto co-hosted a half-day seminar on immigration issues. The impressive line-up of speakers included Joyce Cavanagh-Wood, from the Consulate General of Canada, Buffalo NY; George Bowles, Citizenship and Immigration Canada; James P. Egan, Egan LLP, Barrister and Solicitors/ Ernst & Young GemS; Hugh Williams, United States Consulate, Toronto; Nikki Pavlov, J.D. Edwards and Evan Green, Green and Spiegel, Barrister and Solicitors.

Speakers provided in-depth information on existing legislation and practice, from both a Canadian and U.S. perspective, and outlined changes that are anticipated over the next several years. They also discussed border and security issues and those in attendance gained valuable insight on developing effective travel and human resource strategies for their companies.

The keynote speaker was Minister of Citizenship and Immigration Denis Coderre. The Minister emphasized the important linkage between an effective immigration program and Canada's trade and economic growth, particularly at a time when Canada-United States border issues are very important to both countries. Minister Coderre stated that “September 11, 2001 made vigilance in our immigration program an essential issue for Canada -- even more than it already was. Since then, we have worked hard to show that our immigration program is an active part of the answer to the security concerns that Americans and Canadians share.” At the same time, the Minister stated the importance of “regulating the door, not building walls”.

Such openness is extremely important for a number of reasons. According to Statistics Canada, immigration could account for virtually all labour force growth in Canada by 2011. However, as the Minister stated, openness is not about just adding people to our population; it is about adding the skills that Canada needs to succeed in a competitive global economy. Statistics Canada tells us that in 1991, recent immigrants made up 13% of the highly skilled workforce. By 2001, they were 24% of our highly skilled workforce. Recent immigrants were particularly important in vital fields, such as computer-related occupations, accounting, engineering and natural sciences. The Minister is also very cognizant of the fact that many people come to Canada with skills but face roadblocks in the recognition of their credentials. The government of Canada is working with professional associations, the provinces and territories and other important key stakeholders to remove the roadblocks. Business, however, must do its part. The Minister stated that it is up to employers to be even more open to the skilled newcomers around us.

Minister Coderre also highlighted the achievements of his department over the last year:

	A new Immigration and Refugee Protection Act came into effect in 2002.
	The first federal-provincial-territorial meeting of immigration ministers held last fall was a resounding success. It demonstrated how governments can work together so the entire country prospers from the benefits of immigration.
	A new Citizenship of Canada Act was introduced that modernizes our citizenship processes and reinforces the value of Canadian citizenship.
	A task force was set up last fall to provide recommendations to regulate immigration consultants. The Minister is waiting to hear from them, but indicated at this event that consultants will be regulated in 2003.
	A Permanent Resident card was introduced to bring a much higher level of security for permanent residents and all Canadians.
	The Minister has also asked his department, as a priority, to review Canada's refugee determination system.

For further information contact Tina Kremmidas, Senior Economist, (416) 868-6415, x222, tkremmidas@chamber.ca.

News Release March 3, 2003

Canada-U.S. economic action plan launched – Canadian Chamber

VANCOUVER -- March 3, 2003 --Canada’s business leaders are initiating an urgent Action Plan to bolster both the immediate and long-term success of the Canada-U.S. economic relationship, today announced the Canadian Chamber of Commerce during its national Board meeting. The Action Plan acknowledges that progress on economic issues must be linked to security, the number one priority for the U.S.
“Canada must do more to demonstrate to the U.S. that it takes our common security seriously, otherwise access to the U.S. market for our goods and services is very vulnerable,” said Siobhan Coady, Chair of the Board of Directors of the Canadian Chamber of Commerce.
The Canadian Chamber Action Plan includes the creation of a Taskforce between the Canadian Chamber of Commerce and the U.S. Chamber of Commerce, which will propose practical solutions to trade and investment problems between the two countries. The Can-Am Chamber Taskforce will examine ways of streamlining existing regulations, assess new forms of economic cooperation, and suggest new ways of resolving trade disputes.
“Business in Canada and the United States must find new ways of working together to ensure that our mutual economic interests are preserved,” continued Ms. Coady.
The Canadian Chamber Action Plan also calls for the federal government to institutionalize the framework for managing the border providing focus, visibility, coordination and a point of contact on all border issues in Canada, and to work with the new department of Homeland Security.
“While the Deputy Prime Minister has provided strong leadership in this area, it is time to create a permanent means to directly respond and interface with our U.S. counterpart,” stated Nancy Hughes Anthony, President and CEO of the Canadian Chamber of Commerce. “Currently, our government structures on the border are diffused and lack a central responsible authority.”
“Leadership on our economic relationship with the U.S. has to come from both business and government,” added Ms. Hughes Anthony. “The actions taken by both to date are only the beginning if we are to enhance this relationship in the long-term.”

Cross Border Security Issues

As you are well aware, September 11, 2001 has had (and continues to have) a tremendous impact on the way the world is doing business. Nowhere is this statement more true than in Canada - where border security has become a huge consideration in conducting daily business transactions between Canada and the United States. FULL STORY...

In a recent meeting with government officials and the Minister of

National Revenue Elinor Caplan (who is also responsible for the Canada Customs and Revenue Agency), we were asked to urge our members to be proactive in their daily business routines insofar as security is concerned. Government cannot work in a vacuum on this issue and needs the assistance of the business community to take similar cautionary steps. Expecting to conduct North American business today in the same way as was done on September 10, 2001 is to expect complications. Many businesses have upgraded their security procedures over the past year and these steps are welcomed. However, given current tensions and possible threats, the assistance of business is being sought to maintain vigilance and caution.

Attached is a short checklist that enables business to self-assess their preparedness.

U.S. Customs 24-hour Rule
Further to our note in the last news@chamber.ca regarding new U.S. Customs rules for advance transmission of customs manifests, the Chamber submitted comments on the proposals that were issued in January. These comments expressed concerns about the timeframes that were proposed, made some broad suggestions on alternatives, and raised other operational issues such as the level of detail that will be expected in the advance-transmitted data.

The Canadian Chamber of Commerce appreciates members’ input received on this issue. There will be more draft rulemaking on this subject in the months ahead, as U.S. Customs intends to have this rule in place by early October. The Chamber will continue to provide input and monitor this issue closely. For copies of the Chamber's comments, or for further information on this issue, contact Alexander Lofthouse at (416) 868-6415 x234, or alofthouse@chamber.ca.

Border Security Checklist
A short checklist dealing with cross-border business and security was distributed to Chamber members across the country last week. The checklist is designed to help businesses self-assess their preparedness and also provides resources for those businesses seeking further details on customs pre-clearance contacts and programs.

In a recent meeting with government officials and the Minister of National Revenue Elinor Caplan, the Canadian Chamber of Commerce was asked to communicate to our members the need to be proactive in their daily business routines insofar as security is concerned. Clearly, government cannot work in a vacuum on this issue, and needs the assistance of the business community to take similar cautionary steps. Many businesses have upgraded their security procedures over the past year and these steps are welcomed. However, given current tensions and possible threats, the assistance of business is being sought to maintain vigilance and caution.

Each business knows its own situation best. As a result, the checklist is no more than a starting point for thinking about individual scenarios. However, small measures taken within individual Canadian companies can expedite transactions at the border. Moreover, they make good business sense in this new business climate.

Please feel free to distribute the checklist with your stakeholders and colleagues, it is available on the Chamber’s web site http://www.chamber.ca/public_info/2003/borderchecklist03.pdf. For further information, contact Alexander Lofthouse, (416) 868-6415, x234, alofthouse@chamber.ca.