Despite the fact that the federal government anticipates the budget will not be balanced by 2014-15 as originally forecast, Canadian Construction Association (CCA) president Michael Atkinson says the construction industry is one of the better industries, if not the best industry to be in right now
In the current economic landscape Canada is still one of the best places to be and construction is among the best industries to work in, says the president of the Canadian Construction Association (CCA).
Despite federal Finance Minister Jim Flaherty’s recent announcement that the federal budget will not be balanced by 2014-15, as promised, CCA president Michael Atkinson is not worried.
“Certainly the construction industry is one of the better industries, if not the best industry to be in right now in term of the prognosis and what we can look forward to in the future in terms of our services.”
Last month Flaherty learned from economists that the budget assumptions of economic growth were no longer applicable; meaning Ottawa revenues from taxes would be lower than anticipated.
With these new numbers, the national deficit will rise from the previously thought $19.4 billion next year to $27.4 billion, and for 2013-14, from $9.4 billion to $17 billion.
In the previous budget, Ottawa was counting on savings from departmental cutbacks to eliminate the deficit in 2014-15, but now the expectation is for a $3.5 billion deficit, once $4 billion in savings are included. Without counting the savings, the deficit would have been $7.5 billion.
In total, the government is adding about $29 billion of deficit from the current year to the end of the planning horizon in 2015-16.
According to the government’s new fiscal track, the government will record a $600 million surplus in 2015-16, only if all the savings from cutbacks are realized.
Atkinson said last week’s announcement doesn’t change the commitment the federal government has made to keep the Gas Tax Fund on permanently. Atkinson said the government is committed to discussing the future after the current Building Canada Plan which is expected to result in infrastructure investments of more than $26 billion before its 2014 conclusion. The plan will be discussed with key stakeholders and includes contributions from provinces and territories.
“From that perspective, we’re not expecting the federal government to change its desire to see infrastructure as a top priority item going forward.”
The government is also advancing public-private partnerships (P3s) to produce value for taxpayers in the delivery of public infrastructure, by ensuring that P3 proposals are developed for federal procurement projects where there is P3 potential.
As part of the measures to aid job and economic growth, Flaherty announced a reduction in the maximum potential increase in Employment Insurance premium rates in 2012 to five cents from 10 cents, which Atkinson said will help.
“Employment Insurance premiums are taxes on jobs. They are an inhibitor to employers engaging or creating new job because they’re a payroll tax, so anything that can be done to take disincentives out of the equation so that job creation can continue, I think is good step.”
Among other measures for job and economic growth, there will be a temporary extension of an enhancement to the Work-Sharing Program of up to an additional 16 weeks for active, recently terminated or new work-sharing agreements, until October 2012. Long-term jobs in various sectors are also expected to be created through the rebuilding of fleets of the Royal Canadian Navy and the Canadian Coast Guard.
With files from The CANADIAN PRESS