(February 2008) Canadian business owners shopping for capital equipment south of the border got an additional boost from the federal government today. However, entrepreneurs outside of manufacturing found little in terms of direct aid in the Conservative budget

Bankrate.ca, by Romana King and Philip Porado
February 2008

A strong loonie has already been boosting business owners' purchasing power, and now a proposal to implement three years of accelerated capital cost allowance (CCA) treatment will let those buying manufacturing and processing equipment between 2009 and 2011 write off that equipment at an accelerated rate over a three-year period.

"There are some good things for capital cost allowances for manufacturers, railway companies, and anybody who buys clean energy generation equipment," says Marc Lamontagne, a principal at Ryan Lamontagne Inc. in Ottawa. "But, as a business owner, there's no reason to revise your financial plan tomorrow."

Last October's goodie-laden mini-budget got the ball rolling when it unveiled a temporary, two-year, 50% straight-line accelerated CCA rate for those buying new equipment before next year. This budget extends the treatment for three more years. "This will include a one-year extension of the 50% straight-line accelerated CCA treatment, followed by a twoyear period during which the accelerated treatment will be provided on a declining basis," according to budget documents.

The hope is that by extending the breaks until 2011, businesses will be able to retool, boost productivity and add value to production processes at a time when the surging dollar has made Canadian goods expensive for importers. The budget further proposes to increase the CCA on the purchase of rail equipment to 30% from 15% with an eye toward encouraging operators to switch to more fuel-efficient locomotives.

Full text: Budget 2008: Capital investment will garner writedowns


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