Business leaders

are welcoming the investment policies unveiled in Tuesday’s

federal budget

, but some questioned whether Prime Minister Mark Carney’s government was aggressive enough and warned there is more work to be done to ensure the measures

deliver an economic payoff

.

“This was a transformational budget at a time in which the country is truly in crisis,” said Goldy Hyder, president and chief executive of the

Business Council of Canada

, during a webinar

hosted by KPMG

on Wednesday.

Ultimately, however, Hyder said the federal budget was too cautious, and that he had hoped Carney’s government would have gone further.

“I think the Canadian public gave them social licence to go further, faster, deeper and they just didn’t take that up.”

The budget was in large part a response to the economic consequences of the trade war with the United States, which has led to downgrades to Canada’s growth outlook and an eight per cent contraction in business investment in the second quarter of this year. To counter that decline, Carney’s government promised to target $500 billion in private investments over the next five years.

Among the new measures introduced are accelerated capital cost allowances for low-carbon liquefied natural gas facilities and immediate expensing of manufacturing and processing buildings, a key ask from the manufacturing sector.

“I’ve been around CME for eight years and this has been on our list for a decade,” said Dennis Darby, president and chief executive of

Canadian Manufacturers & Exporters

. “It’s positive that they responded, and we are hoping it remains permanent.”

Darby added that he hopes the federal government will eventually implement a manufacturing tax credit and launch a comprehensive tax review.

“We need a comprehensive tax review to make sure we are competitive, because we are in a heated battle for capital,” he said.

The budget also included $115 billion in infrastructure spending and $25 billion for housing over the next five years.

“Canada has underinvested in critical infrastructure for decades,” said Rodrigue Gilbert, President of the

Canadian Construction Association

(CAA), in a statement. “These investments reflect the essential role of housing-enabling infrastructure in addressing the national housing shortage and committing substantial resources to these projects.”

The CCA would also eventually like to see a coordinated national workforce strategy, to address the industry’s labour shortages, by connecting immigration, apprenticeships and upskilling, while eliminating the stigma associated with the skilled trades.

Tuesday’s budget projected a deficit of $78.3 billion this year, and the federal debt is expected to hit $1.347 trillion in 2025-2026.

The Carney government also promises to find $60 billion in operational savings over the next five years through its comprehensive expenditure review. This will include finding efficiencies among government programs and the loss of 40,000 jobs in the public service from its peak in 2023-2024.

“Execution will be key,” said Bill Morneau, former finance minister and corporate director at the

Canadian Imperial Bank of Commerce

, during the webinar. “I am pleased they are making significant efforts; we’re not getting back to the scale of the public service when I left in 2020, we’re moving back to period after that, so I think there will more work to be done in this area.”

The budget also highlighted the previously announced “Buy Canada” federal procurement strategy, which the trade embattled steel industry welcomed at a time when it is still facing 50 per cent sectoral tariffs from the United States.

Catherine Cobden, president and chief executive of the

Canadian Steel Producers Association

, said this measure will drive opportunities for the industry, but would like to see more efforts from the federal government to protect the domestic steel market.

“We remain steadfast in our need to urgently recapture our domestic steel market share to 80 to 85 per cent, in line with our key trading partners of the United States and the European Union,” she said, in a statement. “To achieve this, we continue to urgently call for further measures at our border.”

The budget did signal the potential removal of the oil and gas emissions cap, but promised to strengthen the industrial carbon price system.

Federal regulatory burdens continue to be a drag on investment, with Statistics Canada estimating they rose by 37 per cent between 2006 and 2021.

“I think some of the regulatory stuff still kind of lingers out there,” said Hyder. “It’s not just about taxes, it’s also about regulations, and I say this with great respect. It’s not just the federal government that determines these things, our provincial governments also have a role.”

Hyder said only time will tell if the measures are enough to make the economy more competitive.

“The measurement will be, ‘Did capital get deployed?’, because it’s not a question of whether we did good enough against ourselves; it’s how we do against the competition,” he added.

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• Email: jgowling@postmedia.com