We have all seen what has been happening to the manufacturing sector in Canada over the last few years. The good news is that the folks in Ottawa are starting to notice. Some of these changes could really help out the sector with some built in incentives to spur innovation as well. For the next few yeas it looks like the Capital cost Allowance (CCA) will be putting in place a program which will allow accelerated capital depreciation. The incentive is designed to promote productivity enhancements creating operational efficiencies which will help Canadian manufactures competing globally. In addition, .........................................................
announced in January a temporary 100% CCA rate on computer hardware and software acquired between January 2009 and February 1,2011, while manufacturing and processing equipment will remain at 50% allowing it to written off in two years on average which will help any companies tax situation.
As an added bonus, certain Tariffs have been eliminated in order to make access to foreign machinery at a lower cost, and when you order that machinery, the BDC would be glad to help you finance it at 125% in order give you the additional funds necessary for installation and training. Now if your bank loves you and is begging to give you money at prime you won't need the BDC, but if your bank is a bit grumpy and isn't interested in investing in your business the BDC compliments of the federal government is willing to help. Naturally there is a cost associated with this help, but it's rather acceptable at around 8% (with good financial standing). This rate will usually beat out the average lease rate which is usually the only alternative if your bank is in a bad mood. All in all these are some great programs and it is great to see the federal government taking an interest in business again. Please feel free to contact us with any questions you may have regarding any of these programs.
