CALGARY - Ottawa needs to find ways to help Canada hold on to its skilled workers and draw talented immigrants to the country, Finance Minister Jim Flaherty said Tuesday as he held pre-budget consultations in Calgary -- a city that is all too familiar with labour shortages.
Flaherty met with business leaders and academics over breakfast to discuss what measures the government should take to ensure that Canada "keeps its best and brightest, attracts the most desirable immigrants, encourages as many people as possible to enter the work force and rewards Canadians for their hard work while respecting the government's fiscal goals.''
He added: "Population aging and labour shortages will be among Canada's most daunting economic challenges over the coming years ... To meet these and other challenges we must explore all of the options that are available to us.''
Alberta and the three other western provinces have been experiencing labour shortages, especially in skilled trades and professions working in the booming energy sector. Workers from across Canada have flocked to the northern Alberta oilsands sector, where billions of dollars of new investments to expand heavy oil output have led to big wage increases for workers and shortages of everything from steel and machinery to big trucks and other equipment.
The Calgary Chamber of Commerce has called for the federal budget to include tax cuts and other incentives for retirees to return to the workforce. One of the suggestions proposed last year was to craft more flexible retirement plans to encourage older people to continue working.
The Calgary meeting was the last of Flaherty's consultations, which began last year. A summary meeting will be held in Ottawa next month and the budget will be handed down shortly thereafter.
Flaherty noted that his government has pledged $190 billion in tax relief over the next five years and suggested there may be more to come.
"Our government is establishing a proud legacy of tax relief but we can and we must do more. We believe Canadians still pay too much tax in this country,'' he said.
One of Flaherty's aides said later any additional tax reduction won't make dramatic cuts like the ones announced in a mini-budget in October but will look for ways to introduce more tax relief over the coming years.
In his speech, Flaherty urged provincial governments to follow Ottawa's lead and slash its corporate taxes -- especially in Central Canada, where the manufacturing sector has been feeling the pinch of a high dollar and a slump in exports of everything from cars and auto parts to paper and lumber.
"If you reduce those taxes, businesses can plan ahead, they can invest more in modern technology and equipment,'' he said.
"They can become more productive. If they're more productive they're more competitive and that's how we make sure that we have a strong manufacturing sector in Canada by letting business breathe in this country.''
In another development, Flaherty said the federal government does not plan on changing its rules on bank ownership despite the fact that Canadian banks have been struggling due to the U.S. credit crisis.
In its submission to the Competition Policy Review Panel Bank of Nova Scotia, made public on Monday, CEO Rick Waugh urged the federal government to scrap the restrictions.
Current federal rules limit ownership stakes in large domestic banks to 20 per cent, making it impossible for big mergers or takeovers.
Despite the fact the Canadian Imperial Bank of Commerce has posted billions of dollars in writedowns over the last few months, Flaherty said he's "comfortable with the state of Canadian banking'' and doesn't want to take any action.
"Our Canadian banks are well capitalized,'' he said. "We have a strong banking system in Canada, which is a benefit for us, certainly. The issue of bank mergers is not a priority for this government.''
Flaherty also held pre-budget consultations Monday in Vancouver, where he said Canada should avoid creating a patchwork of carbon taxes and greenhouse gas rules across the country.
The issue of carbon taxes is politically sensitive. Quebec became the first jurisdiction in Canada to put in place a green tax on carbon fuels in its last budget.
But the idea isn't popular in some other provinces, particularly Alberta and Ontario.
