OTTAWA—Small and medium-sized businesses and clean energy investments were some of the highlights in this year’s, likely defunct, federal budget.
Some highlights include:
The budget proposes extending the Capital Cost Allowance (CCA) for another two years.
Currently, machinery and equipment purchased to be used in Canada after March 2007 and before 2012 is eligible for a temporary accelerated CCA rate of 50 per cent.
The budget extends that measure to 2014.
The 2011 version also includes specified clean energy generation and conservation equipment for wind, solar, small hydro and biomass projects.
Ted Mallet, vice-president and chief economist of the Canadian Federation of Independent Business (CFIB) says extending the CCA is absolutely criticall for companies dealing with small capital expenditures.
“The CCA will increase investment intentions and we need to keep that momentum going. Our small manufacturers deserve to have the right equipment on hand,” he says.
Andrew Jackson, chief economist at the Canadian Labour Congress (CLC) says the CCA extension would help Canadian businesses more than the proposed corporate tax cuts.
“A lot of manufacturers are financially stretched right now making it critically important that they make new investments instead of cutting jobs,” he says.
Temporary hiring credit
The budget also features a temporary hiring credit for small business offering up to $1,000 against an SME’s increase in 2011 Employment Insurance (EI) premiums over those paid in 2010.
It also extends the work-sharing agreement by up to 16 weeks meaning companies can avoid layoffs by offering EI benefits to employees who are willing to reduce their work week while the company recovers.
“This is something we’ve been pushing for,” says Mallet. “We need to encourage growth and development and it’s already hard enough for smaller companies to add employees. Even adding one employee to a small firm is tremendous in terms of production and associated costs.”
Red tape reduction for small businesses
The feds have promised $3 million annually to BizPal to make the online service permanent and allow technology infrastructure upgrades.
The service launched in 2006 and allows owners to quickly generate a list of business permits and licenses that are required by all levels of government to do business.
“Regulation, after taxes, is the biggest concern for small businesses,” says Mallet. “Reducing the government’s footprint on day-to-day operations has become absolutely vital for the success of Canada’s SMEs.”
Mallet adds government regulation costs SMEs roughly $30 billion annually.
$80 million for IRAP pilot projects
Budget 2011 is promising $80 million in new funding over three years for a pilot project through the Industrial Research Assistant Program (IRAP).
Joint projects between colleges and SMEs will help accelerate adoption of information and communications technologies.