The Government of Canada released its Fall Economic Statement for 2018 with a focus on addressing the business competitive landscape in Canada. The Canadian Government acknowledged that the recent tax reform in the U.S has significantly reduced the overall tax advantage that Canada had previously enjoyed.
To address business concerns, the Government has introduced key measures to ensure that Canada’s business climate remains a viable market for investment and growth. The measures include tax write offs, enhanced trade opportunities for SMEs and a commitment to reduce the regulatory burden on businesses.
Tax Write-Offs
The accelerated write-offs will assist businesses making investments in capital assets in buildings, machinery, and equipment. Specifically it will allow businesses to write off a larger share of their costs in the same year the investment is made.
Key measures include:
- Allowing businesses to immediately write off the full cost of machinery and equipment used for the manufacturing or processing of goods.
- Allow businesses to immediately write off the full cost of specified clean energy equipment.
- The Accelerated Investment Incentive, which will allow businesses of all sizes and in all sectors to write off a larger share (up to 100 per cent) of the cost of newly acquired assets in the year the investment is made.
Enhanced trade opportunities for SMEs
The Fall Economic Statement shows the Government’s commitment to significantly expand export opportunities for SMEs. The goal is to increase Canada’s exports by 50 per cent by 2025 with a focus on sectors that have market demand in certain parts of the world. The Government has announced that:
- The Can Export program and related programs, which help Canadian businesses find new markets, will be expanded in size. The expansion is to support businesses looking to tap into CETA (Comprehensive Economic Trade Agreement) and CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) markets.
- An expansion of a program to help small and medium-sized businesses in the steel, aluminum and manufacturing sectors explore new export markets created by recent trade deals. A $50 million investment was announced last June, and this economic statement provides $100 million more over six years.
- $13.5 million for a ‘mentors’ program for “high-potential exporting firms.”
- $10 million for partnerships with other levels of governments and business organizations to help small- and medium-sized businesses compete internationally.
A Decreased Regulatory Climate
The Government has acknowledged that regulatory burden has become a barrier to innovation and economic growth. The Government has announced that it will:
- Make regulatory competitiveness a part of every department’s mandate.
- Introduce an annual modernization bill to remove outdated or redundant regulations.
- Create an External Advisory Committee on regulatory competitiveness. The committee will introduce regulatory changes to promote innovation and economic growth.
- Launch a Centre for Regulatory Innovation to speed up the integration, adoption, and commercialization of new approaches and emerging technologies. It will also help businesses understand existing regulatory requirements and connect them with relevant regulators, to get them the help they need to develop and deploy new products and service.
- Enact policy changes and introduce regulatory measures that respond to recommendations from the business community.
Vaughan Chamber Analysis:
Faster write-offs for new investment, regulatory reform and concrete actions to accelerate the removal of barriers to trade within Canada are all important steps in the right direction, and we applaud the government’s initiatives in these areas. Specifically, we welcome the government’s commitment to regulatory reform, as it reflects some of the core elements of the report released by the Canadian Chamber Network, Death by 130,000 Cuts: Improving Canada’s Regulatory Competitiveness.
While the measures announced today will help address Canada’s competitiveness challenges, we remain concerned over a number of issues that have not been addressed, such as their lack of commitment to a full review of our tax system or a clear, realistic strategy for balancing the public books.
The Vaughan Chamber of Commerce will continue to work with the federal government to ensure the voice of the business community is heard in order to build a more prosperous Canada where all Canadians have the opportunity to succeed.
