TORONTO, March 21, 2013 /CNW/ - The Canadian Institute of Chartered Accountants (CICA)* gives the federal government a B Plus rating for a budget that focuses on balancing the books while providing targeted funding to spark economic activity.
The government is committed to returning to balanced budgets by 2015-16.
"With lingering economic uncertainty, the government's focus remains a multi-year incremental approach to balancing its books that allows for the funding of initiatives aimed at creating jobs and economic growth," explains Gabe Hayos, vice-president, taxation, with the CICA. "However, it is essential that the government stays on course and gets its finances in order if Canada is to achieve a sustainable recovery."
The budget outlines a fiscal framework that features a skills training initiative, infrastructure funding and new investments to support manufacturing and innovation in Canada.There are no significant personal or corporate tax increases but the government is taking action to preserve its tax base. The budget looks to close tax loopholes, address aggressive tax planning, clarify tax rules, reduce international tax avoidance and tax evasion and improve tax fairness. It also provides the Canada Revenue Agency with new tools to enforce the tax rules. "We support efforts to maintain the integrity of the tax base, but the CICA will work closely with Finance and the CRA to ensure that casting such a broad net of actions does not result in unintended consequences," says Hayos. The CICA would have preferred to see more action to reduce the complexity of Canada's tax system, making the country more attractive for investment. The Institute welcomes greater disclosure requirements for scientific research and experimental development claims without further restricting contingency fee arrangements relating to the tax incentive program. "This is something we recommended," stresses Hayos. "The ability to engage third-party preparers on a contingency fee basis often allows companies to increase innovation spending."