How the 2013 Budget May Affect Your Business

Parliament Buildings, Ottawa

Last Thursday the federal government tabled its budget for 2013, revealing few surprises, shuffling resources into skills training and long-term infrastructure projects.

Despite a lower global growth forecast, Finance Minister Jim Flaherty repeatedly asserted that the books would be balanced by 2015.

We spoke with David Mason, tax partner at Deloitte, about what B.C. businesses should watch for in the 2013 budget.
BCBusiness: What changes should businesses be concerned about?

David Mason: There’s a number of tax changes in there that could affect different businesses depending on what they’re doing. There’s a change to the dividends rate, there’s some tweaking with some other taxes and there’s also a real push to go after what the government sees as loopholes.
It’s prudent when you’re doing tax planning to understand the risks of tax planning and to understand Canada Revenue Agency’s perspective on them. They don’t like tax planning ideas, and they’re certainly shutting them down in subsequent budgets.
BCBusiness also asked David Mason what the budget has in store for specific industry sectors. The following is a summary of his responses.
Tech: There’s support for Genome Canada, Sustainable Development Canada, teaching hospitals, universities, and the big granting agencies that will go to supporting research partnerships. This includes $1 billion for aerospace.
Forestry: $92 million to support forestry innovation and marketing, some of which will end up in B.C.
Small businesses: If you increase the number of people that you’re hiring they won’t charge you EI premiums in the first year (given that your premiums were less than $15,000 in 2012).
Retail: Elimination of tariffs on sporting goods and children’s clothing will mean savings for customers, perhaps clawing back retailers’ margins.

BCBusiness also gathered input from a range of industry associations. Here’s their take on the federal budget:

Vancouver Board of Trade: B+

  • Likes: Commitment to spending control and debt management, the government’s target for a balanced budget by 2015-2016.
  • Dislikes: Potential impact of the dividend tax credit amendments on the tax rates of no-eligible dividends. The ways expenses will be treated for mines, which could impact the number of new mines.

Mining Association of B.C.: Encouraged

  • Likes: the extended 15-per-cent mineral tax credit, renewal of $500-million-a-year labour market agreements, the “one project, one process” policy for environmental assessments
  • Dislikes: None stated.

B.C. Technology Industry Association: Happy to see support for business accelerators.

  • Likes: $60 million over five years for accelerator and incubator programs, the $100 million from the Business Development Bank of Canada for strategic partnerships between accelerators and graduating firms.
  • Dislikes: None stated.