Calgary businesses, professionals doubt budget will spur spending

Some Calgary business people wonder whether the spending plans and tax changes in Tuesday's federal budget will actually get consumers buying and boost the economy as expected.

Although the tax reductions are welcome, consumers are more likely to save the extra few hundred dollars rather than spend it, said Carlos Santos, who owns a photography shop in the city's southeast.

The extra $200 to $500 left in people's pockets is not going to be enough for them to make a major purchase, he said.

"You can't even buy a refrigerator if you need one, right? Buy a DVD player? Maybe a Game Boy for the kids?" he said.

The billions earmarked for infrastructure as well as the home renovation tax credit may be have more success, but the overall deficit spending is cause for concern, Santos said.

Calgary immigration consultant Gita Boyd said it looks like the government is using the budget to try to buy its way out of the recession.

"I think they're hoping to get a few more years in government," Boyd said. "I think it's not going to do us much good. It's going to be a burden for my children and grandchildren to repay."

Calgary tax expert Doug Ng said the budget was clearly focused on stimulus spending, with tax cuts given only secondary consideration.

Although the home renovation tax credit may encourage people to spend, he said, it only helps people who make enough money to pay taxes in the first place.

None of the tax reductions will help people in the near future since they will not kick in until the 2009 tax year, he added.

The budget was a big disappointment and will do little to increase the country's productivity, said business columnist Deborah Yedlin.

The government failed to take the bold measures needed to aid the economy and to provide a strong vision for the country, she said.

"There's none of it, and that's what is really unfortunate," she said.

The budget didn't have much for the province's oil and gas sector, she said. The industry needs access to financing and higher commodity prices to ensure stability.