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SOMBA K'E/YELLOWKNIFE
Exploration tax credits, start-up company funding, and continuing hiring credits for small businesses are some of the 2012 federal budget items that have Yellowknife industry hailing it as a "pro-business budget."

Federal Finance Minister Jim Flaherty tabled his Economic Action Plan 2012 last Thursday, and his agenda, aimed at bolstering Canada's long-term economic strengths and promoting job growth, hit the target for the Yellowknife Chamber of Commerce.

"It is a very pro-business budget by the look of it," executive director Tim Doyle said. "What's happening here is we're seeing a shift from the federal government, where traditionally there's been a heavy hand in government involvement in the business community, and they're setting up policies now that are allowing business to create growth. And that's a very positive side of this budget."

Among the top items that the chamber is hoping will be taken advantage of in the city, are half-a-billion dollars toward the growth of innovative start-up companies, and the extension of the hiring credit for small businesses.

"That's going to be the next wave of growth," Doyle said. "Yellowknife has a lot of small businesses and one of the most expensive features for any small business owner is labour, and if you could cut down on that cost then you've given them a chance that they can grow their business. We're well in favour of that."

In addition, some of the bigger, deeper-pocketed companies, including Yellowknife-based mining and transportation companies, can benefit from more than $1 billion earmarked for research and development, Doyle said.

Meanwhile, the NWT Chamber of Commerce praised the plan's "one project, one review" initiative.

"Here in the NWT we are seeing our diamond mines draw closer to the end of their producing lives with each passing day," stated acting president Hughie Graham. "The common sense idea of having just one review capped at 24 months for major resource development projects will help ensure new developments are able to take their place and fuel our economy into the future."

The eventual closure of the territory's diamond mines is "a very real issue," said Tom Hoefer, executive director of the NWT and Nunavut Chamber of Mines, which applauded the budget's extension of the 15-per-cent mineral exploration tax credit.

"Mines don't last forever," Hoefer said. "We know there are planned closing dates for diamond mines sort of creeping up and coming even faster than we may realize. We need to replace those mines if and when they close and quite frankly, we don't have enough projects in the pipeline to be ready for that."

As the exploration hub of the North, Yellowknife businesses, namely expediting and aviation companies, greatly benefit from increased exploration, Hoefer said.

While general industry response to the budget was positive, the eventual increase of the age of eligibility for Old Age Security to 67 from 65 starting in 2023 raised concern.

Doyle called the increase a "two-year clawback" because people who receive OAS every month tend to spend it in the economy, he said.

"It's not money that gets put aside into retirement savings plans or anything like that, that money is spent," Doyle said. "It is strictly recycled right back into the economy, so they're going to be removing an awful lot of money for a two-year period out of the economy.

"That's a ways down the road but it is a concern because that's one of the golden eggs of the Canadian social system and we'll wait and see if that comes back to haunt the government."

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