Business confidence lacking in federal budget: survey

While 43% of Canadian business people rate last week’s Federal budget a “B” or higher overall, respondents were generally split down the middle on the specific measures it entailed, a new Ernst & Young survey found.

According to the survey, 57% ranked this year’s budget a “C” or worse.

“Not unlike the Canadian political scene itself, the response to the budget was somewhat polarized,” said Gary Zed, tax markets leader with Ernst & Young. “The business community seems particularly divided on whether this budget will stimulate jobs and growth or the economy overall — which we know was a major focus for the government this time around.”

Forty-four per cent of respondents said they believe the budget would stimulate jobs and growth moderately, with a further 1% saying they believed it would provide a strong stimulus – in contrast to the 46% who did not think the measures introduced would drive results in these still-struggling areas.

Respondents were similarly split on whether the budget struck the right balance between stimulating the economy and reducing government expenditures, Ernst & Young said. While 36% agreed that it did (and a further 6% strongly agreed), 38% disagreed (and 13% strongly disagreed). Forty-five percent of respondents also said the budget would stimulate business investment from their company’s perspective, while an almost equal 46% said it would not.

In contrast, respondents were much more aligned in their views on whether the federal budget deficit will be eliminated by 2015, as projected in this budget. While 32% thought it likely or highly likely, a whopping 67% thought it unlikely, or highly unlikely. They were similarly vocal in their agreement that the recent federal budget trend toward lower corporate tax rates to provide an internationally competitive tax environment was good economic policy (75% agreed or strongly agreed; only 23% disagreed or strongly disagreed).