Incentives for businesses part of federal economic update
On November 21, Federal Finance Minister Bill Morneau updated Canadians on the state of the national economy when he released the Fall Economic Statement (FES).
The minister used the FES to highlight the government’s economic policies. The FES also lays the groundwork for the next Federal Budget.
In response to growing concerns that business competitiveness is lagging in Canada as a result of tax and regulatory changes in the United States, Minister Morneau announced a number of measures to address business competitiveness, including incentives for greater investment in capital via changes to the capital cost allowance regime. The government hopes that these measures will alleviate some competitiveness concerns.
New measures announced in the FES include:
- Allowing the full cost of machinery and equipment used in the manufacturing and processing of goods to be written off immediately for tax purposes, and by introducing the Accelerated Investment Incentive to support investment by businesses of all sizes and across all sectors of the economy.
- Allowing specified clean energy equipment to be eligible for an immediate write-off of the full cost.
- Permitting businesses of all sizes and sectors to write off a larger share of the cost of new assets.
It’s expected that elements of the FES will be topics of discussion when the first ministers meet in Ottawa on December 7. It is speculated that the 2019 federal budget will be presented some time in March. The next federal election is scheduled for October.