AED's McGuire talks Canadian equipment industry policy priorities with BNN
On November 23, AED's President & CEO Brian P. McGuire spoke live on the air with BNN Bloomberg, one of Canada's top news networks reporting on business, finance and the markets.
To view a video of the conversation visit: https://www.bnnbloomberg.ca/vi...
The discussion with BNN Bloomberg centered around AED's policy priorities in Canada, including tax changes that incentivize capital investment, infrastructure funding and trade issues. The interview occurred a day after the Canadian government released its much anticipated Fall Economic Statement.
Last month, AED delivered a letter to Finance Minister Morneau urging the government to pursue tax policies to incentivize capital investment, such as accelerated depreciation for equipment purchases. The government heeded the association's advice and announced it will triple the first-year deduction for equipment purchases from 15 percent to 45 percent. The new policy is expected to take effect in the coming months and apply to the 2019 tax year.
Accelerated depreciation will allow Canadian companies to increase cash flow, which can be used for further capital investment (more machinery, building new locations, etc.), creating jobs and higher wages for current workers. Most important for construction equipment dealers, it should encourage customers to purchase new machines and give distributors an incentive for acquiring inventory for rental fleets.
For example, say Road Contractor Company renews its fleet of aging excavators and skid steers for $2,000,000. In addition to increased efficiency and lower operating costs from the technological advances incorporated into the new equipment, Road Contractor Company will be able to deduct $900,000 for tax purposes in the first year the equipment is used, compared with $300,000 without the Accelerated Investment Incentive. The result is about $160,000 in federal-provincial tax savings. This example doesn't constitute tax advice and is based on figures provided by the Canadian government. Always consult with your accountant or tax attorney for accurate tax advice.
For questions about AED's Canadian Government Affairs program, please contact AED's Vice President of Government Affairs Daniel B. Fisher at [email protected]
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