Construction industry seeks stable levels of investment from new government

With another federal election at hand, the construction industry is concerned about the stability of government investment and the possible implementation of the carbon-tax.

After meeting with the Governor General Michaëlle Jean at Rideau Hall on September 7, Prime Minister Stephen Harper said Canadians will head to the polls in a general election on October 14.

Harper's Conservative party has been in power since January 23, 2006, when it won a minority of seats.

Representatives of the B.C. construction industry believe a majority government is needed to maintain a consistent level of government spending and policy.

"We hope the outcome of the election doesn't detract from current construction activity levels, said Manley McLachlan, president of the B.C. Construction Association.

"It would be an asset to the industry if the end result of the election brings stability to government programs and initiatives.

In western Canada there is more at stake than there ever has been, due to the fact that we are leading the country in economic growth."

Heading into this election, the Conservatives held 127 seats, while the Liberals had 95.

The Bloc Québecois had 48 seats, the New Democratic Party 30, and there were three Independent members of Parliament.

"I think most people want a majority government, but the election may not result in that," said Philip Hochstein, president of the Independent Contractors and Businesses Association of B.C. "The Conservative's policies have been good for B.C. and the construction industry, because they lowered the GST as well as corporate and personal taxes. They have helped apprentices by giving them a tax break. And most importantly, they have invested in infrastructure.

Hochstein argues that the election is about who is best for the construction industry and the Conservatives have certainly done well on the industry's behalf.

Harper began his campaign by taking direct aim at the Liberals, led by Stéphane Dion, and their promotion of a new carbon tax. The conservatives argue that the new tax will place a heavy burden on families and constrain economic growth.

"This tax is essentially a flow-through tax for the construction industry, which is resilient in adjusting to rising costs, whether materials or labour," said McLachlan. Costs are incorporated into the cost of the service being offered. The carbon tax could affect economic growth at this time and place given the uncertainty around some elements of the industry."

If elected, the Liberal government would levy $15.4 billion in new taxes on Canadian industries that produce high carbon emissions. According to the Liberal's plan, the higher prices for energy would be offset by broad-based tax cuts.

"We are not opposed to the federal government taking more aggressive action on climate change, it's just a question of how it is done," said Gil McGowan, president of the Alberta Federation of labour. "We support the implementation of a carbon trading system, which is now being discussed in B.C. and Manitoba."

McGowan is concerned that the federal government and Alberta government are not engaged in the current discussions on the carbon trading system.

"The Harper government has done nothing on this file and continues to fiddle as Rome is burning," said McGowan. "This does not mean we agree with everything the Liberal's do, but doing nothing should not be considered an option. Whatever approach we take to climate change has to balance the need to protect the environment and the need to maintain a healthy economy."

Journal of Commerce, Wed Sept 10 2008
Byline: Richard Gilbert

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