Industry reaction to Tuesday’s federal budget has been mixed.
Tax advisory firm RSM Canada expressed trepidation over the Liberals’ plan to limit the current stock option tax regime to start-ups and growth businesses, wondering how it will affect middle-market companies and noting that plan details won’t be released until the summer.
“In the interim, until details on any new measures are released by Finance, middle market companies are faced with uncertainty as they plan their affairs,” RSM said in a statement.
Other provisions also drew skepticism.
The government’s plan to introduce a tax credit of $250 per year to cover up to half the costs of Canadians pursuing occupational skills training was met with tempered expectations by advisory firm Grant Thornton LLP.
“While an investment in skills training can help fill some jobs required for tomorrow’s business environment, the question remains if it will move the needle in a meaningful way to close the skills gap currently facing our country,” Heath Moore, Grant Thornton’s national tax leader, said in a release.
In addition to the tax credit, the government will introduce an EI Training Support Benefit, designed to cover employees’ living expenses for up to four weeks while they’re on training leave. The government will also launch an EI Small Business Premium Rebate to help offset the costs of the new program to small businesses — although the Canadian Federation of Independent Business (CFIB) expressed concern that the program would end up subsidizing training that doesn’t help employers.
“CFIB is pleased government is planning an EI Small Business Premium Rebate to help cover some of the increased costs to fund the new program, but calls on the federal and provincial governments for significant consultation to ensure the needs of employers are considered before launching any EI benefits or job protection requirements,” CFIB president Dan Kelly said in a statement.
The Chartered Professional Accountants of Canada (CPA Canada) criticized the budget for failing to provide what it considered adequate tax relief for small businesses, emphasizing its displeasure at the absence of a comprehensive review of Canada’s tax system.
“There is a groundswell of support for a full-scale tax review in Canada, and a much-needed assessment would pave the way for an improved system that best positions the country for economic and social growth,” Joy Thomas, president and CEO of CPA Canada, said in a release. “We hope the platforms of the government and other political parties signal their respective support for a full-scale tax review in the upcoming federal election campaign.”