TORONTO, ONTARIO--(Marketwired - Feb. 11, 2014) - Financial Executives International Canada (FEI Canada), the country's leading association for senior financial executives, is encouraged that the federal government is getting closer to balancing the budget and called on the Minister of Finance to be transparent with Canadians on how it plans to invest the surplus projected in 2015-2016 and subsequent years.
"We are pleased that the government will finally achieve a balanced budget in fiscal 2016. With its surplus projections, we call on the government to outline its future investment strategy and management of our debt levels," said Michael Conway, President and CEO of FEI Canada.
"This includes decisions on allocation in areas including investing in economic growth and employment, funding of pension and other post-retirement programs for public sector plans, and making inroads into reducing the national debt. Once the Minister of Finance has explained his strategies and plans, we will be in a position to analyze the proposals and recommendations and provide feedback," Mr. Conway said.
"We believe that our governments at all levels need to continue investing in our economy and prepare for, and have the necessary fiscal tools available to deal with, the eventual next downturn in the economic cycle," said Tim Zahavich, chair of FEI Canada's Policy Forum.
FEI Canada today outlined its top issues of importance for 2014, which include:
- Create a positive business environment through fiscal prudence and transparency
- Corporate income tax simplification
- Adequate and sustainable retirement programs for Canadians
- Removal of interprovincial barriers regarding trade and labour mobility
- Cyber security
- Accountability, independence and diversity on boards of directors
Financial Executives International Canada (FEI Canada) is the all industry professional membership association for senior financial executives. With eleven chapters across Canada and 1,700 members, FEI Canada provides professional development, thought leadership and advocacy services to its members. The association membership, which includes Chief Financial Officers, Audit Committee Directors and senior executives in the Finance, Controller, Treasury and Taxation functions, represents a significant number of Canada's leading and most influential corporations. www.feicanada.org
FEI Canada's top advocacy issues for 2014
- Create a positive business environment through fiscal prudence and transparency: Significant progress has been achieved in reducing deficits over the past several years, to the point where the government is forecasting a surplus position in fiscal 2015. We strongly support this outcome, in part because we believe that our governments at all levels need to prepare for, and have the necessary fiscal tools available to deal with the eventual next downturn in the economic cycle. With surplus projections, we request the federal government explain publicly its strategy and plans for deployment, including possible difficult decisions on allocation in areas including investing in economic growth and employment, funding of pension and other post-retirement programs for public sector plans, and making inroads into reducing the national debt by establishing specific debt targets and a strategy to achieve them. This public exposure of strategy should begin immediately.
- Income tax simplification: FEI Canada was an early advocate for making tax simplification a priority. The current Income Tax Act is the largest piece of legislation in Canada. It is overly complicated and inefficient to administer with many sections that are irrelevant in today's economy. In addition, reporting for income tax purposes is overly complex and inefficient since it is based on individual legal entities. Corporations should be allowed to report their economic entities on a consolidated basis since that is how many businesses are managed.
- Adequate and sustainable retirement programs for Canadians: FEI Canada continues to encourage the Government to examine options in the development of a national framework on adequate and sustainable retirement programs for Canadians. One recommended option within the framework is a modest expansion of the Canada and Quebec Pension Plans, professionally managed and cost effective, gradually becoming a "fully-funded" model over time. Included in this sustainability framework should be a plan to effectively manage the unfunded shortfall of public sector pension plans estimated to be ~$300B (federal, provincial and municipal). Innovative solutions to the framework and model would ensure long term solvency of retirement programs while maintaining stable contribution rates and preserving a fair standard of living for Canadians.
- Removal of interprovincial barriers regarding trade and labour mobility: Canada is a large country that will continue to have high economic growth is certain areas and minimal growth in others. In order to meet labour force needs, barriers that prevent easy access to available jobs should be removed so that overall Canadian competitiveness remains at a high level.
- Cyber security: The majority of all business communication and transactions are done via the internet and there are no comprehensive, unified security standards over these items. Any sort of security breakdown or cyber-attack on this communication medium could have catastrophic effects on the Canadian economy. There should be a national framework involving government and business to protect this critical medium.
- Accountability, independence and diversity on boards of directors: FEI Canada supports the renewed focus on the corporate governance practices of modern corporations, particularly in relation to diversity. There is an inherent need for Board oversight as it pertains to the various policies, practices and processes within the organization in general. It has been identified that independence and diversity are important policy areas in corporate governance on a number of fronts, and the need to reflect diversity within the Board of Directors is crucial moving forward. There should be timetables for diversity actions put in place by regulators to monitor these activities.