Federal Economic Statement: Raymond Chabot Grant Thornton’s President and CEO Salutes the Positive Effect of Accelerated Investment Incentive.
Emilio B. Imbriglio, President and CEO of Raymond Chabot Grant Thornton, stated from the start: “Our firm has been lobbying for many years to have equipment investments subject to an accelerated capital cost allowance, possibly even grossed up in the first year, to stimulate investments to modernize businesses. The objective is to make our businesses more competitive globally and foster wealth and job creation.”
This measure of the November 21, 2018 announcement by the federal Minister of Finance was well received by the firm, as stated by the President and CEO in a La Presse article. Supporting innovation in business and the export diversification strategy are also interesting ways to help businesses maintain their competitiveness.
Despite the announced accelerated capital cost allowance for the cost of machinery and equipment used for the manufacturing or processing of goods, the Canadian tax system must be more competitive. It would have been preferable for the Minister to do as the U.S. has done and announce a total capital cost allowance for all goods acquired (other than buildings), combined with an appropriate corporate tax reduction.
As a reminder, Raymond Chabot Grant Thornton has been lobbying for this for many years:
The federal government should abolish corporate income tax on the first $500,000 of taxable income of SMEs, provided the resulting savings are invested in productivity, job creation or innovation in a manner that avoids any type of abuse. The investments could be subject to an accelerated capital cost allowance and potentially increased in that year or subject to a tax credit.
Imbriglio added: “We are competing with neighbouring jurisdictions and Canada has a responsibility towards Canadian businesses to ensure their tax environment is as competitive. There is no doubt that making the corporate tax rate more attractive than the U.S.’s would further bolster business growth and give Canada an incentive tax system.”
23 Nov 2018 | Written by :