Business groups say the federal government should prioritize getting Ottawa’s fiscal house in order and implementing tax incentives aimed at ensuring competitiveness with the United States’ clean-energy programs at this week’s cabinet retreat in Prince Edward Island.
The group, which represents Canada’s largest companies, argues that the federal government needs to set a hard target on the level of debt it’s willing to take on, citing rising interest rates. Such a target is commonly called a fiscal anchor. The council wants the government to commit to limiting debt servicing costs to 10 per cent of government revenue, as recommended by former Bank of Canada governor David Dodge.
In his letter, Mr. Hyder also raised concerns that the government has not yet implemented key policies from the spring budget. In March, Ms. Freeland announced $20.9-billion in tax credits over five years, the majority of which were for clean electricity, clean hydrogen and clean-technology manufacturing. However, the details for what will qualify under those programs aren’t yet final, which Mr. Hyder said is delaying investment decisions by companies.
However, with the U.S. subsidies already in place, Mr. Hyder’s letter says Canada’s slower pace means the country risks “losing out on a generational influx” of investment. He said the government took too long to respond to the U.S. subsidies, noting that Canada’s response came seven months later in the budget. Five months after that, Mr. Holmes said, “we’re still waiting to see what it results in and what gets greenlit and what gets out of the gate.”