Chemistry industry lobbies for extended tax write off
OTTAWA: Members of the Chemistry Industry Association of Canada are lobbying the federal government for an extension of a tax measure they say is critical to the survival of Canadian manufacturers.
The Ottawa-based association that represents 50 Canadian chemical companies is calling for a five-year extension of the accelerated capital cost allowance (ACCA) for new machinery and equipment, first introduced in the 2007 federal budget. The ACCA allows businesses to defer the taxes they pay at the beginning of a project – when cash flow is most urgently needed – until a later date.
“A five-year extension of the ACCA is critical for Canadian manufacturers,” said Richard Paton, president of the association. “Investing in new machinery and equipment will make our manufacturers more productive and competitive, will foster innovation and reduce emissions, and will ultimately make our manufacturing sector more sustainable.”
The current ACCA, only available to businesses once new machinery or equipment is installed, expires at the end of 2011.
Paton said the time frame is simply too short for many manufacturers to benefit.
“Most large-scale manufacturing projects take around five years from the initial planning and approvals stage, to the point where the machinery or equipment is installed. So without a five-year time frame, the ACCA is failing to ensure that big projects – and the large number of jobs that they promise – get off the ground,” he said.
Canadian Manufacturers & Exporters, in a recent press release calling for a national economic strategy that focuses on innovation, recommends the two-year write off be extended to at least the end of 2016. It said the federal government should also consider making the accelerated capital cost allowance permanent.
The chemistry industry is Canada’s third largest manufacturing sector.