Budget 2011: Tax incentive for MS overhaul proposed
Pilot Performance Resource Management will be looking for a tax incentive in the March 22 federal budget that will help manufacturers implement and upgrade automated management systems to international standards.
BRAMPTON, Ont.: When the Harper government presents its budget March 22, one of the things Jayne Pilot will be looking for is a tax incentive she has proposed that would help manufacturers, processors and others implement, upgrade and automate management systems to international standards.
The president and principal of Pilot Performance Resource Management Inc. in Brampton, Ont. has been working with federal government officials in Ottawa for three years to get support for an incentive she thinks is critical, especially to small and medium-sized enterprises (SMEs), as many key “boomer” managers retire over the next five to 10 years.
Statistics Canada has reported that about 20% of the population will be aged 55 to 64 in less than 10 years when there may be more people able to retire than those at an age to begin working.
“That’s horrendous,” said Pilot. “With their departure goes years of accumulated knowledge and experience in effective business management, and the loss of so many skilled managers in such a short time will have an unprecedented impact on businesses with.”
Pilot, who has worked with companies in a range of industries to bring their management systems up to international standards, made a presentation to federal finance officials in December and provided additional information in January on what she is calling the Canadian Management System Business System Traceability Initiative (CMS-BSTI).
It entails a $25,000 per year tax credit, starting Jan. 1 and continuing for six years, to help support the implementation, maintenance and improvement of management systems to international standards. These include ISO 9001 (quality), ISO 14001 (environment), and OHSAS 18001 (health and safety), plus several industry specific standards.
A six-year term will allow for recertification and the evaluation of business improvements, which would be verified by recognized, third-party auditors.
Pilot sees the incentive as a means to improve a company’s ability to compete globally, but she is also concerned about business sustainability.
Citing Canadian PLANT’s 2011 Business Outlook results, she notes 31% of the businesses surveyed don’t have a formal process in place to identify and mitigate risk, while another 20% aren’t sure if they have one.
“There’s a need to improve operations. A management systems make-over will concentrate on improving systems and retaining knowledge and know how,” she said.
As a consultant, trainer and auditor, she has observed that many companies are missing structure and still operating with functional silos that prevent information from flowing freely across the organization where it could do the most strategic good.
The program she proposes will encourage businesses to look at their operations in terms of objectives and targets, implement planning and identification of risks. Automating management systems will ensure data and knowledge cross all functions and are not lost through retirement attrition, and that tracking and controls are in place, with verification through audits.
Her proposal offers three options: implementing management systems to international standards; supporting ongoing investment in a recognized management system; or improving management systems and/or traceability.
Pilot’s submission notes other countries such as China and India have supported businesses that have implemented ISO management systems, while the Canadian government has for several years, focused on tax credit programs for R&D. She says the next six years should focus on building strong business processes and global competitiveness.
She’s hopeful the proposal will make it into the federal budget, despite the finance department’s apparent aversion to tax incentives for business, especially when corporate tax rate cuts already on the books could tip the current Parliament into an election.
“The government represents the people, and with enough support and understanding, I believe this project will go through,” she said.
If it doesn’t go through, the wave of boomer retirements and subsequent loss of business knowledge is still a given. “We need this support from government,” she declared. “That is also a given.”