The federal government must take decisive action to increase the availability of credit to Canadian businesses and to enhance capital market efficiency, according to Tuesday’s testimony by the Financial Executives International Canada (FEI Canada), before the House of Commons Standing Committee on Finance (FINA), studying measures to enhance credit availability and the stability of the Canadian economy.
“Greater access to long-term credit financing, particularly for small-to-medium businesses, in addition to increasing inter-provincial trade efficiency and establishing a national securities regulator are all critical factors in helping to shape the foundations of a strong Canadian economy and global competitiveness,” said Michael Conway, CEO and national president, FEI Canada. “Increasing overall accessibility of credit to Canadian businesses will facilitate expansion projects and assist corporations in the growth and development of both human capital and market expansion.”
FEI Canada’s submission to the finance committee focused on three key areas: increasing Canadian business access to credit; enhancing capital market efficiency; and rebuilding confidence in the Canadian economy.
The association of Canada’s senior-most financial executives encouraged the Department of Finance to examine the tax system with an eye to easing the restructuring burdens on Canadian companies noting, “It is imperative that Canada’s tax system supports and enhances the competitiveness of the Canadian economy and ensures its long term prosperity,” said Conway.
Key initiatives to enhance the flow of capital include providing support to the emerging new economy, in the form of start-up capital and follow-on loans to start-up enterprises which focus on innovative new processes and technologies, and green investments. The government was further called upon to provide financial institutions with incentives for granting credit facilities for a period of five plus years.
To improve liquidity and availability of short and long-term funding, FEI Canada called upon the government to assist in the restructuring of the securitization market by ensuring better transparency, accountability and reporting practices.
An increase in targeted government spending on high value infrastructure projects was also recommended in order to improve efficiency in the flow of goods and services through the economy, while ensuring strong financial management governance is maintained over such spending initiatives.
“To rebuild confidence in the Canadian economy, the government must maintain its debt reduction schedule and show spending restraint by focusing its investments on infrastructure, in sectors such as transportation, education and training and research and development, which together will drive growth and improve productivity,” Conway concluded.
IE
FEI Canada calls for increased credit availability to businesses and capital market efficiency
Immediate action needed to restore confidence in economy
- By: IE Staff
- March 31, 2009 March 31, 2009
- 10:25