Sault Chamber of Commerce responds to federal budget

NEWS RELEASE

SAULT STE. MARIE CHAMBER OF COMMERCE

******************* Government sends the right signals with today's budget Sault Ste. Marie - The new federal government has sent several positive signals to business with the release of today's budget, according to the Sault Ste. Marie Chamber of Commerce.

To create an environment for jobs and growth, Budget 2006 proposes to make Canada's tax system more internationally competitive for businesses by reducing the general corporate income tax rate to 19 percent from 21 percent by 2010, eliminating the corporate surtax for all corporations as of 2008, and eliminating the federal capital tax as of the start of 2006, two years ahead of schedule.

These are all welcome items suggests Dan Theriault, president of the Sault Chamber, particularly the elimination of the capital tax ahead of schedule.

We applaud the government for moving on this item immediately, he adds. In addition to the news above, small businesses received some relief in today's budget as well.

Today's budget proposes to increase the amount of small business income eligible for the 12 percent tax rate to $400,000 from $300,000 as of January 1, 2007 and reduce the 12 percent tax rate applying to qualifying small business income to 11.5 percent in 2008 and 11 percent in 2009.

It comes as little surprise to most that the government announced a decrease in the Goods and Services Tax (GST) in today’s budget.

This is positive news for consumers and is welcomed by most businesses that have to charge and collect the GST, however it is going to mean that many businesses are going to have move immediately to start preparations for the change-over which goes into effect on July 1 of this year. Cash registers are going to have to be reprogrammed, inclusive pricing re-factored, accounting, online and pre-authorized payment software updated and, in many cases, pre-printed and promotional materials changed or updated.

The Chamber urges businesses to begin pulling together their to-do lists relating to the rate change as soon as possible so that things don’t get overlooked when July l arrives.

Theriault notes the Sault Chamber is also pleased to see that the government announced several new apprenticeship-related grants and tax incentives.

"Canada is on the verge of a skilled trades shortage and unfortunately this is a problem that has only recently started to garner attention. However, some positive steps were taken in this budget which will assist both businesses that hire apprentices as well as apprentices themselves," he notes.

Included in today's budget, specific to apprenticeships and skilled trades were a new tax credit of up to $2,000 for employers who hire apprentices, a new $1,000 grant for first- and second-year apprentices, and a new $500 tax deduction for tradespeople for costs in excess of $1,000 for tools they must acquire as a condition of employment.

Also, the $200 limit on the cost of tools eligible for the 100 percent capital cost allowance will be increased to $500.

"Overall, it appears that the government has heard the call and acknowledged the need to reduce the tax burden of both Canadian tax-payers and businesses alike," suggests Theriault. "The announcements today are positive steps for the economy, for working Canadians and for small and medium sized business owners." Theriault echoes the call of the Canadian Chamber of Commerce that the government must remain fiscally prudent, in order to be able to respond to any potential downturn in the economy and also to take advantage of any opportunity to further pay down the country’s national debt.

The Sault Ste. Marie Chamber of Commerce is the recognized voice of business for Sault Ste. Marie, committed to the enhancement of economic prosperity in our community.

The chamber is 950 members strong and has been serving the needs of Sault Ste. Marie since 1889.

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