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TORONTO, January 27, 2009 – The Chartered Accountants of Canada give the federal budget a B-plus rating as the government attempts to navigate through unsettled economic times. Canada’s CAs welcome the budget’s provision of economic stimulus through targeted spending and new tax initiatives along with a continued commitment to previously announced corporate tax cuts. “Canada’s economy needs lifeboats now,” stressed Kevin Dancey, FCA, President and CEO, Canadian Institute of Chartered Accountants (CICA). “A flotilla of lifeboats arriving too late will help no one.” The CA profession is encouraged by the fact that most of the government’s stimulus spending is to take place over the next two years and is to be phased out when the economy recovers. Other budget measures drawing praise were tax related including: - A one-year Home Renovation Tax Credit providing up to $1,350 in tax relief per household.
- Increasing the basic personal amount and the top of the two lowest personal income tax brackets by 7.5per cent above their 2008 levels, allowing Canadians to earn more income before paying federal income taxes or being subject to higher tax rates.
- Increasing the amount of small business income eligible for the reduced federal tax rate of 11 per cent to $500,000.
The government is forecasting to run deficits until 2013 due in large measure to a spending rush on infrastructure projects to quickly provide a much-needed boost to Canada’s struggling economy. The deficits over the coming years will significantly eat away at past debt-reduction efforts. More than 80 per cent of the debt reduced over the past 10 years will be reinstated with the projected deficits outlined in the budget. “There is an uneasiness any time a government turns to deficit financing but these are extraordinary times,” said Dancey. “Driving down debt levels is like dieting. It is much easier to put the weight on than it is to take it off. For government, it is much easier to spend than it is to reduce the debt load. It will be important for the government to get back on its diet with a focus on debt reduction once times improve.” The Canadian Institute of Chartered Accountants (CICA), together with the provincial,territorial and Bermuda Institutes/Ordre of Chartered Accountants, represents a membership of approximately74,000 CAs and 10,000 students in Canada and Bermuda. The CICA conducts research into current business issues and supports the setting of accounting, auditing and assurance standards for business, not-for-profit organizations and government. It issues guidance on control and governance, publishes professional literature, develops continuing education programs and represents the CA profession nationally and internationally. CICA is a founding member of the International Federation of Accountants (IFAC) and the Global Accounting Alliance (GAA). – 30 – For more information or to arrange an interview, contact:
Tobin Lambie, Manager, Media
CICA
(416) 204-3228
tobin.lambie@cica.ca
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