First Audet budget
Restrained and targeted in terms of the economy
but Montreal still on the back burner
Montreal, April 21, 2005 Overall, the Board of Trade of Metropolitan Montreal finds that this budget provides the manoeuvring room required to invest in innovation, fuel productivity and ensure Quebec's economic competitiveness, stated Board of Trade president and CEO Isabelle Hudon.
We understand that the government's limited manoeuvring room compelled it to make tough choices and effectively target its interventions. In this context, we like Finance Minister Audet's pragmatic approach to the economy and his restrained interventions. However, the Board of Trade contends that in order to create wealth in Quebec, the budget should have focused more on Montreal, added Isabelle Hudon.
The choices made in this budget demonstrate the Minister's commitment to attract investments to help the Quebec economy grow. The Board of Trade is pleased to see measures, which although modest, signal that the government is ready to support individuals and businesses seeking to contribute to Quebec's economic vitality. These measures include tax cuts for SMEs, a reduction in the tax on capital and a capital tax credit on new machinery and equipment investments.
During the pre-budget consultations, we emphasized to Minister Audet the need for concrete measures, at least in certain key sectors of the economy. We considered it particularly important to take action in the manufacturing sector, which is operating in a highly competitive global environment. The 5% capital tax credit for machinery and equipment investments is therefore a welcome response to the recommendations we made three years ago, said Isabelle Hudon.
The Board of Trade will also closely follow the budget's export goals. These goals seem to indicate that the government clearly understands the needs of companies that currently export or plan to do so. We are eagerly waiting to hear what Minister Claude Béchard and his department plan to do in this regard and are offering the expertise of our World Trade Centre Montréal team to help him achieve his objectives, added Mrs. Hudon.
That said, the Board of Trade is concerned about the effects of increasing the large corporations tax, which enabled the Finance Minister to reduce the tax on capital. Although the reduction was needed and sought after, the means used to this end could have serious consequences for some companies. We hope Minister Audet will pay attention to these consequences and adjust his policy if necessary. Moreover, given the national political context, we consider it quite risky to plan a long-term increase in business income tax based on the cuts announced in the last federal budget, continued Mrs. Hudon.
However, our greatest reservation is that fact that Montreal still does not appear on the government's radar screen and is not a priority in the budget. Thus, in addition to not breaking its two-year silence on city and public transit funding, the budget provides no assurance that the money Quebec will collect from the federal gasoline tax and the additional investments it will make in the Société de financement des infrastructures locales (SOFIL) will be allocated in such a way as to meet the real needs of Quebec's economic engine, the Greater Montreal area, concluded Isabelle Hudon.
The Board of Trade of Metropolitan Montreal has some 7,000 members. Its primary mission is to represent the interests of the business community of Greater Montreal and to provide individuals, merchants and businesses of all sizes with a variety of specialized services to help them achieve their full potential in terms of innovation, productivity and competitiveness. The Board of Trade is Quebec 's leading private economic development organization.
Coordinator, Media relations
Board of Trade of Metropolitan Montreal
Tel.: (514) 871-4000, ext. 4015