Canada's CAs give federal budget a B-plus grade

TORONTO, March 4 /CNW/ - Canada's Chartered Accountants (CAs) are cautiously optimistic about the federal budget giving it a B-plus rating.

"This is really a wait and see budget," said Kevin Dancey, FCA, president and CEO, Canadian Institute of Chartered Accountants (CICA). "We won't know if this is a successful budget until the government demonstrates that it has the ability to rein in costs."

It also is a transition budget as the government prepares to move away from its stimulus spending to restraint. The budget confirms $19-billion in new federal stimulus under the second year of the government's Economic Action Plan. It also charts a course to return Canada to fiscal balance but only brings the deficit down to $1.8-billion by 2014-2015.

"We would have preferred to see the government use a sharper pencil to get to a balanced budget sooner," said Dancey. "While on the right track, it is unfortunate that the budget does not indicate when the country will return to fiscal balance as there is not a lot of room for error in the economic forecast."

Dancey added: "It is much easier to spend than it is to cut costs. The government cannot flinch. Execution will be the key to reducing the deficit."

Canada's CAs welcomed the government's continued commitment to cut corporate taxes. The government remains committed to reducing the corporate income tax rate to 15 per cent by 2012.

"Over the longer term, as improving finances permit, we urge the federal government to further reduce the corporate tax rate to the small-business level," said Dancey. "Moving to a single rate would reduce the complexity of the tax system while lowering compliance costs."

The small business rate is 11 per cent.

The budget also announced a number of other measures in an effort to close perceived tax loopholes and promote fairness. In addition, the government is taking action to eliminate remaining tariffs on imported machinery and equipment.

The Canadian Institute of Chartered Accountants (CICA), together with the provincial, territorial and Bermuda Institutes/Ordre of Chartered Accountants, represents a membership of approximately 75,000 CAs and 12,000 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).

For further information: or to arrange an interview, contact: Tobin Lambie, Manager, Media, CICA, [phone], [email protected]