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Kamloops News

FUHR: Good for business

Image Credit: SUBMITTED
November 24, 2018 - 12:00 PM



Canada’s current economic strength is a reflection of the successful efforts of Canadians to build an economy that works for everyone.

 With one of the fastest growing economies in the G7, Canadians have created more than 550,000 new full-time jobs, pushing the unemployment rate to a 40-year low. In addition, wage growth is outpacing inflation and after-tax profitability of businesses is leading to stronger consumer confidence and positive conditions for investment.

This is good news at a time when concerns about US tax reform have left many wondering if Canada can remain competitive and continue to attract investment.

 This week’s Fall Economic Statement delivered by the Government on November 21st should put these concerns to rest.

The measures introduced in the Fall Economic Statement will ensure that Canada maintains a tax advantage in attracting new investments. The average overall tax rate in Canada on new business investment—as measured by the Marginal Effective Tax Rate (METR)—will fall from 17.0 per cent to 13.8 per cent. This will give businesses in Canada the lowest overall tax rate on new business investment in the G7, significantly lower than that of the United States.

 Furthermore, new proposed tax measures for business will provide focused, fiscally responsible support for growth-generating investments in Canada, while continuing to keep the debt-to-GDP (gross domestic product) ratio low and on a downward track.

Specifically, three immediate changes to Canada's tax system are designed to enhance business confidence and encourage more job-creating investments:

Allowing businesses to immediately write off the full cost of machinery and equipment used for the manufacturing or processing of goods will spur new investments, and support the adoption of advanced technologies and processes in this highly mobile sector.

Allowing businesses to immediately write off the full cost of specified clean energy equipment will encourage new investments and the adoption of advanced clean technologies in the Canadian economy.

And introducing the Accelerated Investment Incentive will allow businesses of all sizes and in all sectors of the economy to write off a larger share of the cost of newly acquired assets in the year the investment is made.

Already the feedback has been positive.

The Canadian Federation of Indpendent Business said the measures in the Fall Economic Statement will make it easier for business owners to invest and further, that they welcome the government’s commitments to reduce red tape and to break down internal trade barriers.

Perrin Beatty, President and CEO, Canadian Chamber of Commerce noted that 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.

With additional measures that include reducing the small business tax rate to 9% on January 1, increasing the Strategic Innovation Fund, supporting export diversification and creating a Social Finance Fund that gives charitable, non-profit and social purpose organizations access to new financing, the government is building on a strong economic environment and encouraging an even stronger investment climate.

 Prevailing economic winds are inevitable whether the result of changing global political realities or rapid technological change. By keeping business and personal taxes low, addressing our social needs, and supporting an economy that continues to create good jobs to support families, our govenremnt is doing all it can to build resiliency and maintain confidence in the Canadian economy.

— Stephen Fuhr is the Member of Parliament for Kelowna-Lake Country and the Chair of the Standing Committee on National Defence.

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News from © iNFOnews, 2018

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