Some major Canadian business groups say they are ready to work with the new Liberal government of Justin Trudeau to find common ground to benefit the country’s economy.
“We will press the new government to avoid a return to structural deficits,” Perrin Beatty, president and chief executive officer of the Canadian Chamber of Commerce said on Tuesday, adding that “we are confident we can use the resolutions adopted during last weekend’s annual general meeting to find common ground that will help grow the economy.”
“Having a strong majority government will permit Mr. Trudeau to put in place a strong plan to promote Canada’s competitiveness,” Mr. Beatty said in a news release.
The Liberals’ plan to invest in infrastructure, “if done strategically, will be positive for Canada’s economy,” he said. “New transportation infrastructure will increase access to markets for Canadian businesses of all sizes.”
The chamber would also like to be consulted on its concerns regarding business competitiveness as the new Liberal government prepares for the Paris Climate Change Conference next month, Mr. Beatty said in an interview.
The Canadian Federation of Independent Business said it looks forward to working with the new government on such issues as reducing the corporate tax rate, controlling the payroll tax load, better access to skilled labour and addressing the training needs of small business.
The Liberals have promised to reduce the small business tax rate to 9 per cent from 11 per cent.
David Lindsay, president and CEO of the Forest Products Association of Canada, said he wants to make sure the proposed infrastructure investments are not limited to urban projects such as public transit but also include improving transportation links in rural and remote areas.
“If, by infrastructure, they mean all infrastructure in Canada and a reliable transportation system, then that’s great,” he said.
Engineering companies are among the potential winners following the Liberal party’s sweeping electoral victory while the win could be a negative for the country’s oil patch.
The Liberals’ election promise to run modest deficits in order to boost infrastructure spending as a way to stimulate the economy could pay off for companies such as Edmonton-based Stantec Inc., Montreal-based SNC-Lavalin Group and WSP Global, and Aecon Group of Ontario.
Engineering and consulting companies, particularly SNC, Stantec and WSP “could be early beneficiaries of any boost to infrastructure spending given their involvement in the front-end of project planning,” Canaccord Genuity said in a recent market outlook report.
On the other hand, Prime Minister-designate Justin Trudeau has indicated his government would be selective about giving the green light to oil-and-gas export pipelines and be tougher on the environmental and regulatory fronts.
“While we do see it as a near-term risk, the lack of oil pipeline capacity build-out could create pinch points for egress of Canadian light and heavy crude oil,” the Canaccord Genuity report says.
A proposed Liberal clampdown on the use of the Canadian Exploration Expenses tax deduction would also have potential negative impact on investment in exploration drilling, it said.
Meanwhile, the Harper government angered the country’s two major railways when it sided with western Canadian farmers who complained about poor rail service after the massive harvest of 2013. The government imposed minimum weekly shipping volumes on the railways – backed by fines – even though the companies said the unusually harsh winter and record crop was the cause of the grain backlog.
Hunter Harrison, chief executive officer of Calgary-based Canadian Pacific Railway Ltd., said the change in government is “neutral” for the company, and he hopes the Liberals will not have such a heavy hand on regulating grain shipments.
“With due respect to our Conservative friends, they ain’t done much for us,” Mr. Harrison said on a conference call with analysts. “The Liberals didn’t do much for when they were in, and now the Liberals are back…. Just leave us alone, give us a level playing field and let us run our business.”