Budget 2012 to be “transformational”: PwC

The firm says it expects the budget to put forth changes to Canada’s Economic Action Plan to address its current fiscal situation and to enhance economic growth and create jobs.

“This will be a transformational budget where the government will look to do things differently and be clear about its mandate,” said Roxanne Anderson, PwC’s federal public sector leader. “Budget 2012 presents an opportunity for the government to make significant changes to spending, revenue generation, back office operations and how it will support research and innovation.”

The budget should also communicate the government’s strategies for cutting expenditures and adapting to economic changes, Anderson said.

“Similar to running a smart and efficient business, the government will need to be clear about its plans for modernization, creating back-office efficiency and promoting growth.”

Canadian businesses will be looking for Budget 2012 to support investment opportunities at home and abroad, according to Nick Pantaleo, PwC’s Canadian national tax services leader.

“This includes staying the course on corporate tax cuts, modernizing the tax system to attract additional investment and stimulate exports and supporting Canadian innovation,” he said.

PwC’s Budget 2012 recommendations include:

Move towards a more efficient and competitive corporate tax system by continuing with the planned corporate tax rate reduction, and consider fulfilling government’s long term revenue needs with a more efficient tax base and revenue mix;

Realize the current plan for fiscal balance through the various spending restraint initiatives, most notably the Deficit Reduction Action Plan;

Increase Canada’s international trade, investment and tax agreement efforts, particularly with emerging countries, to expand the global reach of Canadian businesses and increase exports;

Ensure that Canada’s financial sector maintains its respected soundness through appropriate regulation and surveillance;

Consider opportunities to improve the compliance and administrative costs of Canada’s scientific research & and experimental development program; and

Follow the direction of Britain and other countries and consider introducing patent or innovation box legislation to enhance the development and commercialization of intellectual property in Canada.