Time to move past Trump's tariffs and focus on boosting growth, Chamber of Commerce tells Liberals

OTTAWA — It’s time to move past the battle against the trade threats from U.S. President Donald Trump and focus more on boosting Canadian competitiveness, one of the country’s most influential business groups told the Carney government in its pre-budget submission.

In a document sent this week to the House of Commons finance committee, the Canadian Chamber of Commerce said it’s urgent that governments cut excessive red tape and permitting delays, boost domestic capital markets, dismantle interprovincial trade barriers and slash taxes so that Canadian companies can compete better with those in the United States and elsewhere.

“If the theme for 2025 was strengthening Canada’s resilience in the face of external trade threats,” the chamber advises in its submission, “then our collective focus for 2026 must be on fostering Canadian competitiveness.”

David Pierce, the chamber’s vice-president of government relations, said the Canadian economy needs more than small moves around the margins to stay competitive and attract investment. “I think a big swing is needed.”

The chamber’s submission, obtained by National Post, was delivered to the parliamentary finance committee Tuesday, but has not yet been posted publicly or sent to Finance Minister François-Philippe Champagne. It marks the second pre-budget submission unveiled this week from a major business group that calls on the Liberal government to take an aggressive swing at improving competitiveness and economic growth.

The Canadian Federation of Independent Business (CFIB), which represents more than 100,000 independent or small businesses, said in its submission that Canada is facing an “entrepreneurial drought” in that more businesses have closed their doors over the last four quarters than have been launched, despite the country’s growing population.

CFIB’s policy wish list included a cut to the small business income tax rate, changes to make capital investments more enticing and adopt a range of measures to make hiring more attractive.

The Chamber of Commerce, meanwhile, told the committee that Canada can’t compete internationally with a tax and regulatory regime that is seen as slower, more cumbersome and less friendly to investment. The organization calls on the Carney government to review income tax policy to ensure that Canadian business taxes are on a level playing field with the U.S.; streamline and digitize processes to reduce the regulatory burden on business; and expand eligibility for the clean technology manufacturing investment tax credit.

The chamber also encouraged the government to establish an independent Canadian Resources Advisory Council to support the “responsible development” of the energy industry, change the labour code to add more resolution tools so that supply chains aren’t disrupted and consider attaching strings to major federal transfers to encourage provinces and territories to eliminate costly internal trade and labour mobility barriers.

Pierce said a competitive business landscape is the foundation for a successful economy. “Business success is what generates tax revenue.”

The Canadian economy has held up better than many economists expected last year when Trump began imposing new tariffs on Canada and others. But Canada has for years been battling against weakening productivity and competitiveness, challenges that directly affect business’ ability to grow and produce jobs and Canadians’ standard of living.

The federal and provincial governments are also sitting on growing piles of debt, which can affect interest rates. Separatist movements in Quebec and Alberta and Trump’s pro-business agenda have also made Canada’s investment climate a tougher sell.

In its first budget last fall and in last month’s spring economic update, the Carney government took some tepid steps to try to tackle competitiveness and productivity but is seen to have not yet taken the big swing that many business leaders believe is necessary and overdue.

Instead, Champagne has argued that Canada is among the leaders in the G7 when it comes to economic growth and its debt-to-GDP ratio. The federal government has now accumulated about $1.29-trillion in debt, almost half of which has been added over the last five years. In its spring economic update last month, the government said it expected to post a deficit of $66.9 billion for the past year, slightly less than expected.

But the Carney government’s economic strategy has received mild endorsements in recent days from the chief executives of two of Canada’s largest banks.

The Bank of Nova Scotia’s Scott Thomson said Wednesday on an earnings call that foreign investors are starting to look again at Canada, adding that he’s “relatively optimistic” about the country’s economic outlook.

The Bank of Montreal’s Darryl White, on that company’s earnings call, also said he sees stronger growth on the horizon. White pointed to Ottawa’s moves to set firm deadlines for major project reviews and approvals, streamline consultations, establish special economic zones and trade corridors, and simplify regulatory reporting.

National Post

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