Manufacturers can continue to write off investments in new equipment and machinery more quickly under a two-year program extension announced on Sept. 18 by Finance Minister Jim Flaherty.
Details on extending the accelerated capital cost allowance program to 2015 were released by Flaherty at an auto parts plant in Brampton, Ont.
The extension was first announced in March in the federal budget.
“It matters and it works for manufacturers and processors in Canada,” Flaherty said of the extended program. “It makes our business more competitive which is very important in the world market.”
The measure, which involves a straight line 50 per cent depreciation rate instead of a declining one, has been used by about 25,000 businesses in Canada to buy new machinery, said Flaherty.
The minister pointed to growing investment in machinery and equipment by Canadian manufacturers, which went up 11.1 per cent in 2010 and was up 24.8 per cent in 2011.
As reported by the Canadian Press, the head of the Canadian Manufacturers and Exporters association said the tax break extension gives companies help with the capital they need to invest in improvements.
“The measures…not only makes Canadian manufacturers more cost competitive but their future is going to depend on the investments they make in new products, new markets and new technology,” said Jayson Myers.