CPA Canada experts react to disappointing Fall Economic Statement

/EIN News/ -- OTTAWA, Dec. 16, 2024 (GLOBE NEWSWIRE) -- CPA Canada is disappointed that the federal government’s Fall Economic Statement is increasing deficits once again for 2024-2025 and upcoming fiscal years.

The government accrued $21.8 billion in spending in 2023-2024 due to rising liabilities, but at the same time, allocated an additional $24.2 billion for new “priority” investments.

Included in this spending is approximately $1.6 billion for the government’s two-month GST holiday. CPA Canada’s chief economist, David-Alexandre Brassard, says Canada cannot afford this measure, especially given that the government will be paying interest on the money it’s borrowing to support the short-term relief for consumers.

“The economy has been systematically over-performing in the last two years due to historic population growth, yet we’ve seen no improvement in reducing our federal deficit. In fact, the deficit continues to worsen year after year,” Brassard says.

Notably absent from the FES was any mention of the $250 cheques the government had proposed sending to millions of Canadians this spring. A senior official confirmed its exclusion, citing a lack of support from other parties.

The FES also outlines measures aimed at boosting Canada’s productivity, including the $17.4 billion to extend the Accelerated Investment Incentive, $1.1 billion in new spending to enhance the Scientific Research and Experimental Development tax incentive program and an expansion of the capital gains rollover on business investment.

“While CPA Canada welcomes these investments in innovation and entrepreneurship, we stand by our call for stronger fiscal anchors to ensure sound budgeting practices and effective deficit management,” says John Oakey, CPA Canada’s vice-president of taxation.

Additionally, CPA Canada appreciates the government’s commitment to improving the certainty and integrity of Canada’s tax system. However, we are concerned about the lack of substantial progress on key tax initiatives such as trust reporting, capital gains inclusion rates and clean economy investment tax credits. We continue to stress the importance of certainty in our tax system, as long delays in legislative approval erode taxpayers’ confidence.

For more information or to schedule an interview, please contact media@cpacanada.ca.