Canadian Plastics

Federal budget shows little support for plastics industry (April 01, 2005)

The federal budget presented in February put forth the promise of corporate tax reductions and the elimination of the corporate surtax a few years down the road, but has few other items to address man...

April 1, 2005   Canadian Plastics



The federal budget presented in February put forth the promise of corporate tax reductions and the elimination of the corporate surtax a few years down the road, but has few other items to address manufacturer’s woes.

Canadian Plastics Industry Association president and CEO Serge Lavoie calls the Liberals’ budget “a disappointing document for the plastics industry and manufacturing in general.”

“The bad news is that there is no set of measures designed to spur growth and development in the domestic manufacturing sector, even in the face of increased global competition and a high Canadian dollar,” states Lavoie.

“The ominous news is that there is an entire chapter of the budget that discusses possible measures to build the cost of pollution and environmental degradation into the tax regime.”

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Lavoie notes that improvements to the Capital Cost Allowances are targeted almost exclusively to investments in green technology and renewable energy. “There appears to be nothing for CCA improvements to spur manufacturing innovation or productivity, a recommendation that CPIA has made, along with other groups representing manufacturers.”

The budget does contain some opportunities for the plastics industry, Lavoie adds, especially for companies in the construction sector as a result of the increased EnerGuide Retrofit Incentive Program.

He notes that the new corporate tax rates, when fully implemented, will increase the differential between U.S. and Canadian rates and should help in attracting new investment and in protecting or attracting further manufacturing programs.


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