March 4, 2010

Budget 2010

Canadian Construction Association calls for ‘tapered withdrawal’ of stimulus

March 2011 budget shaping up to be real ‘critical one,’ CCA president says

VINCE VERSACE

staff writer

Prime Minister Stephen Harper’s handling of the federal infrastructure stimulus tap in the shadow of a $39.4 billion deficit is a key item in Thursday’s federal budget, says the Canadian Construction Association. “A tapered withdrawal of the stimulus measures is what we have been calling for,” says CCA president Michael Atkinson.

“We are looking for some kind of language in the budget which shows (the federal Conservatives) may use that type of flexibility in their approach with respect to the stimulus programs with the March 31 deadline.”

The Conservatives unveil the 2010 federal budget Thursday and it comes with wide-ranging speculation from possible spending cuts to toeing the line in the current recovery from the recession.

Canada’s deficit was recently reported at $39.4 billion with $16 billion attributable to the government’s stimulus program, Canada’s Economic Action Plan.

“There are low expectations since they are only half-way through their economic action plan,” says Atkinson. “The March 2011 budget is shaping up to be the real critical one from our perspective.”

By March 31, 2011 the federal government says it will cease funding any infrastructure stimulus projects and its stimulus measures will have run their course.

Atkinson says he won’t be surprised if in Thursday’s budget the Conservatives put in place vehicles by which to determine if there are going to be cuts in program spending in next year’s budget.

CCA would like to see a commitment to stay with infrastructure programs and possible future ideas for such programs beyond 2011. It also hopes to see some kind of language to protect stimulus funding for projects slated to wrap up by March 31, 2011, but which may not be complete.

“Let’s say there is a project that is 98 per cent complete by March 31 and it has been delayed by something like weather — we would like to see them not pull the rug out from under it.”

What the federal government will do with EI premiums which have been frozen for the last two years is also of interest, says Atkinson. If the rates are not frozen, EI premiums would be in for the maximum allowable increase under current legislation, resulting in a possible 21 cent increase per $100 of payroll.

“I would anticipate if they are not freezing rates for 2011 we are going to see huge EI hikes,” says Atkinson.

“If you are concerned in not jeopardizing a fragile recovery one of the worst things that could happen is a significant rise in payroll costs. If there is a greater job inhibitor than payroll costs, I do not know what it is, which is why they froze them the last two years.”

Inclusion in the budget of CCA’s long-sought-after accelerated capital cost allowance for purchasing construction equipment, as a new stimulus measure, is another item to look out for, adds Atkinson.

Print | Email | Comment