Media Release

March 15, 2007, The Vancouver Board of Trade

Board of Trade calls for control of "unsustainable" spending in upcoming 2007/2008 federal budget

(L to R) Park, Pantry, Carty — Photo: T. Hadley

The Vancouver Board of Trade’s Federal Government Budget and Finance Task Force today urged the federal government to put a brake on "unsustainable spending" while outlining its budget recommendations at a press conference this morning.

The Board stated that Canada’s taxes on income and profits are the highest of G7 nations — and that these taxes discourage working, saving and investing. Canada’s productivity levels are also no longer internationally competitive.

The Board, representing 5,500 members mostly from small business, claims federal government program spending is simply not sustainable and is a threat to Canada’s economy.

"There’s a disconnect between what Canadian families can spend and what the government spends," explained task force co-chair Janette Pantry. "There has not been an overall, comprehensive program review since 1994 and Canada’s needs have changed over time. We are asking the government to carry out a comprehensive program review to ensure funds are reallocated from low-priority areas to high-priority areas where it is needed, such as the environment and infrastructure development.

"Since 1994, the government has simply been adding increases to spending without adequately reviewing the effectiveness of expenditures and without adequately reallocating expenditures. Making sure that Canadians are getting the best value for their money has always been a top priority for The Board of Trade when Board members are surveyed."

As the rate of federal government spending growth has been significantly more than inflation and population growth combined and continues to exceed the growth of the economy, The Board is recommending annual spending increases of approximately three per cent as opposed to the average six per cent increase over the last five years.

"The federal government must start to control its expenditures better because government spending is growing at a much faster rate than Canadian after-tax disposable incomes. In the interest of fairness, the government should be returning some of Canadian’s hard-earned tax dollars back to them in the form of tax reductions," Pantry said in the list of recommendations.

Co-chair Chris Carty said it is a case of government looking at efficiencies. "In 2006/2007, the government is projecting annual program spending of $188 billion. The question is whether this spending is efficient and giving the best value for Canadian’s tax dollars."

The Board issues its annual Report Card immediately following delivery of the federal budget on March 19, to which the media are invited. The overall grade of "B+" was given to last year’s budget and while The Board commended the government by assigning "A" grades to the areas of Long-Term Vision, Tax Reduction and Debt Reduction, the overall grade fell with a "C" grading for Spending.

• Limit spending increases to the combined rate of inflation and population, or approximately three per cent annually;
• Maintain the nine-year history of balanced budgets;
• Undertake a full review of all program to ensure Canadians receive value for their tax dollars;
• Reduce personal and corporate income taxes;
• Continue to repay the national debt.

For more information, contact Anna Grimes, communications officer, The Vancouver Board of Trade at 604-641-1222.

Related material:

See The Board’s full pre-budget recommendations

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