Canadian Plastics

What the Dickens?

Y ears ago, a literary contest was held to select, among other things, the worst ever opening sentence in a piece of fiction. The winner? "It was a dark and stormy night..." from an 1830 English novel...

April 1, 2008   Canadian Plastics



Years ago, a literary contest was held to select, among other things, the worst ever opening sentence in a piece of fiction. The winner? “It was a dark and stormy night…” from an 1830 English novel.

At the other end of the scale, the best opening sentence was judged to be “It was the best of times, it was the worst of times…” from Charles Dickens’ Tale of Two Cities.

While the sentence from 1830 is good today mainly for showing how not to write, the second half of Dickens’ opening line serves to describe the view some people have of the current state of Canada’s plastics industry.

On the “worst of times” side of the ledger, we have increased competition from Asian countries, an inflated Canadian dollar, speculation of an oncoming recession, growing movements to ban plastic retail bags, and overblown fears concerning the chemical bisphenol A in polycarbonate bottles.

On the other side, though, are those who see the situation more positively, and believe our industry — if not exactly experiencing the best of times — has nonetheless finally arrived at the point of being reinvented for the better. Examples abound of companies implementing lean manufacturing, pursuing value-added molding, and adding new capacity to handle new business — or, as with the recent example of Wittmann Canada, expanding into larger headquarters. In addition, optimistic new moldmakers and plastics processors continue to open their doors, confident of having learned from the mistakes of others.

If you’ll permit me to jump from Dickens to 1930s cinema, those of us who were hoping the recent federal budget would make the supposed worst of times a little less so probably heard in the government’s manufacturing proposals the echo of another famous line, this one from Gone With The Wind: “Frankly, my dear, I don’t give a damn.”

Although it had some positive points, it’s fair to say the budget did not provide the relief our industry, or Canadian manufacturing in general, was looking for.

On the plus side, the budget extends the Accelerated Capital Cost Allowance (ACCA) for an additional three years, to a total of five; adjusts the Scientific Research & Experimental (SR&ED) tax credit system with a 10 per cent allowance for international collaborative research; increases the expenditure limit for R&D spending by Canadian owned privately held companies from $2 million to $3 million; and increases the upper limit for taxable capital and income phase-out to $50 million and $700,000 respectively.

On the negative side, however, the Capital Cost allowance falls far short of a key recommendation made last year by the Standing Committee on Industry, Science and Technology for a two year depreciation over the full five years of the program. Likewise, the tweaking of the SR&ED tax credit system did not meet industry recommendations to make it refundable, to extend the credit to pre-commercialization activity, and to provide an allowance for collaborative research. And overlooked completely was an industry recommendation to provide an Employers’ Training Tax Credit creditable against Employment Insurance premiums.

In the end, it’s hard to conclude our industry was treated with the respect it deserves as an important and innovative part of the country’s economy…and judging by the results of our federal budget readership survey, presented on page nine, most of you agree.

Hopefully, with our industry’s associations and spokespeople continuing to apply pressure, the next federal budget will better address our concerns. Mark Stephen, managing editor, Mstephen@canplastics.com


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