November 26, 2018 | Industry News
Canadian contractors are predicted to be in investment mode in 2019.
In response to U.S. tax reform, on November 21, 2018, Canada’s federal government announced significant tax changes that offer the construction industry help in form of faster equipment depreciation, allowing them to free up capital for other business investments. The “Accelerated Investment Incentive” would enable Canadian businesses to immediately write off the full cost of some types of capital assets, including machinery and equipment.
Eligible assets include virtually all tangible and intangible capital property, such as machinery and equipment, motor vehicles, computers, buildings and intangible assets. The first measure will increase the first-year “Capital Cost Allowance” deduction for almost all new acquisitions of capital assets. The new tax rule measures will generally increase the deduction available in the First Year to three times the otherwise available deduction. For example, for excavators and wheel loaders, the CCA deduction allowed in the First Year may be as high as 82.5 per cent (three times 27.5 per cent.)
“These commitments by the government are essential to enabling Canadian construction firms to compete more effectively in Canada and around the world,” Mary Van Buren, the CCA’s president, said in a statement.
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