Canada minister lauds factory investment writedowns

Mon Mar 18, 2013 3:17pm EDT
 
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By Louise Egan

OTTAWA (Reuters) - Canadian manufacturers have benefited from a measure allowing them to accelerate writedowns of their investments, Industry Minister Christian Paradis said on Monday, but he could offer no guarantees the upcoming federal budget would extend the program.

Finance Minister Jim Flaherty will present the 2013-14 budget on Thursday and has signaled that he will restrain spending to offset weak revenue rather than increase expenditures to boost the sputtering economy.

Ottawa introduced the accelerated capital cost allowance in 2007 to help manufacturers hit by the strong Canadian dollar.

The measure is due to expire at the end of this year, and industry groups have asked for a five-year extension.

"Of course, as industry minister I think this is a measure that is very, very interesting," Paradis told Reuters in an interview when asked if the extension would be granted.

"It added a lot of leverage in the past and I heard a lot of good comments in the multiple roundtables in the last months, for sure," he said in an hour-long conversation in his office.

The measure allows businesses to write off investments in manufacturing and processing machinery and equipment over a shorter time than in the past, enabling them to generate more cash flow.

Paradis was careful to avoid making any promises, acknowledging that Flaherty is under pressure to restrain spending in the budget.   Continued...

 
Canada's Industry Minister Christian Paradis speaks during an interview with Reuters in Ottawa March 18, 2013. REUTERS/Chris Wattie