Press release: Pre-Budget Consultation: the Board of Trade of Metropolitan Montreal Unveils its Recommendations

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Added on 3 December 2002 in Press releases

Press release

Pre-Budget Consultation:
the Board of Trade of Metropolitan Montreal Unveils its Recommendations

Montreal, December 3, 2002- Concerned about the major competitiveness issues in the urban agglomeration of Montreal, and in the interest of its members, the Board of Trade of Metropolitan Montreal has examined the budget choices that the federal and Quebec governments are preparing to make. In this context, the Board of Trade has identified  city financing and business competitiveness as critical issues on which the governments must take action in their next budgets.

The Board of Trade is recommending to both levels of government the pertinent measures required in the short term to meet the pressing financial needs of Quebec's and Canada's large cities.  However, the Board of Trade considers it relevant to state that beyond the current budget year, action must be taken to ensure that the urban agglomerations achieve greater financial autonomy and acquire the powers and means they need to fulfill their expanding responsibilities.

"For the Board of Trade, the answer is not to add new taxes, but instead to find ways to more equitably share the tax base. We would also like to see the municipalities diversify their revenue sources so that they can directly reap the economic benefits of their investments," stated Benoit Labonté, president of the Board of Trade of Metropolitan Montreal.

City financing

In this vein, the Board of Trade recommends: 

  • that the provincial government, together with the representatives of Quebec's largest cities, undertake a comprehensive examination, much like the one undertaken with the City of Montreal on city contract negotiations,  of how to diversify the revenue sources of municipalities and that the resulting recommendations translate into action by the next budget i.e. 2003-2004;
  • that as of the next budget year, the provincial government either exempt the municipalities from the QST or reimburse them in full in this regard; 
  • that  as of the next budget year, the federal government either exempt the municipalities from the GST or reimburse them in full in this regard;
  • that the compensation in lieu of taxes paid by the provincial  and federal governments to the municipalities equal 100% of the local taxes on the property value of all buildings owned by the governments, as of the next budget year.

Business competitiveness

In the current context of fierce international competition and trade globalization, the Board of Trade would like to reiterate the importance it places on the development of Canadian exports. Indeed, insofar as the prosperity of Canadian businesses increasingly hinges on their ability to export and develop new markets, supporting their efforts in this regard is just as relevant as supporting innovation and productivity. Montreal businesses must be able to confront foreign competition and, in this regard, governments can help, notably in terms of taxation.  

As such, the Board of Trade recommends:

  • that the federal and provincial governments eliminate the capital tax - referred to as the large corporations tax at the federal level - given that this tax measure is extremely detrimental to business productivity;
  • that in their next budgets the governments work together or adopt complementary measures to support exporters, namely:
  • A tax credit for companies taking steps to develop their export business;
  • A mechanism to finance salaries for new positions created expressly to develop international markets;
  • The creation of a government-backed fund aimed specifically at financing the export projects of low- and medium-technology SMEs;
  • Participation in the financing of sector-based consortiums of companies and government organizations focused on international business.

As an economic engine and the main site for the creation of wealth in Quebec, the urban agglomeration of Montreal must have political, economic and tax powers and tools befitting its size and heightened economic responsibilities.

"The recommendations formulated by the Board of Trade as the governments prepare their budgets are pragmatic solutions that can swiftly translate into action. The Board of Trade expects the governments to begin fulfilling their commitments by launching concrete initiatives to optimize sustainable economic development for the Montreal agglomeration," concluded Benoit Labonté.

Pre-budget recommendations for 2003
Federal
Provincial

The Board of Trade of Metropolitan Montreal has more than 7 000 members. Its mission is to be the leading group representing the interests of the Greater Montreal business community. The objectives are to maintain, at all times, relevance to its membership, credibility towards the media and influence towards government and decision-makers.

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Source:
Isabelle Hudon, director, Communications
Board of Trade of Metropolitan Montreal
Tel.: (514) 871-4000, ext. 4010
ihudon@ccmm.qc.ca