Canadian farms, food processors, equipment makers and ag-tech firms stand to gain from the federal government's new Productivity Mega Deduction, which lets businesses deduct the full cost of a far wider range of investments at once, Agriculture and Agri-Food Minister Heath MacDonald said on a visit to Allan Equipment Manufacturing Ltd. in Charlottetown, Prince Edward Island, Farms.com reports.
Officials describe the measure as one of the biggest changes to Canada's business tax system in 50 years. The federal government says it raises the share of business assets eligible for immediate expensing from about 15 percent to more than 65 percent, and makes immediate expensing permanent so firms can plan large purchases without waiting for temporary measures to be renewed.
The newly eligible assets include greenhouses, software, research and development, computer equipment, vehicles, patents, fibre-optic infrastructure and transportation assets, categories in which many farm operations, ag retailers, processors and agricultural technology companies are already investing.
The government estimates that the change will cut the marginal effective tax rate on new business investment from roughly 13 percent to 6.4 percent, which it says would be the lowest among major economies and less than half the rate on comparable investments in the United States.
"From farming and farm equipment to food processing and ag-tech, we are turning these strengths into a competitive edge," MacDonald said, pointing to Canada's productive land and farm expertise in a period of global uncertainty.
Farms.com notes that producers face global competition, labour shortages, rising input costs and a growing need for precision agriculture technology, so faster write-offs for equipment, digital infrastructure, research and greenhouses could strengthen the case for modernisation. Whether the measure delivers the investment boom officials expect will be watched across the agri-food chain.
Photo: Andrea_44 / Wikimedia Commons (CC BY 2.0)
Source: Farms.com
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