Manufacturing a big winner in Canada's federal budget

Manufacturers spoke. The Canadian government listened. Canada's largest business sector is a major winner in Budget 2007.

"This budget is good news for Canada's manufacturers and exporters, as well as for the economy as a whole," says Perrin Beatty, president and CEO of Canadian Manufacturers & Exporters. "CME has led the fight for smart policy decisions that reflect the needs of Canadian industry in the 21st century. The budget shows the government is listening. It will help our manufacturers and exporters – the economic engine of the country – be more productive and competitive."

Budget 2007 contains a number of the ingredients in CME's recipe for a strong manufacturing sector, including the temporary introduction of a two-year write-off for investments in manufacturing and processing machinery and equipment.

"This measure is vital to the prosperity of the industry," says Beatty. "Accelerating the Capital Cost Allowance will help manufacturers cope with a rising dollar, boost cash flow and allow them to make the investments they need to remain competitive."

Other elements that CME successfully pressed Ottawa to include in the budget include an accelerated writeoff for buildings used in manufacturing processing; elimination of the withholding tax on interest on U.S. investments in Canada; strategic investments in infrastructure, innovation and workforce development; reduction of the federal paper burden on business; and development of a global commerce strategy.

Two important issues where Budget 2007 is silent include improving the SR&ED tax credit system and enabling employers to assist in skills training. CME will continue to press for action in these areas.

"This budget empowers Canadian manufacturers to be more competitive today," Beatty adds. "Canadian manufacturers can now take advantage of better tools to help them strengthen their businesses and their bottom lines."