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Tax reforms a necessity for manufacturing growth in Canada: CME

Published by Stephanie Brooks on August 16, 2012

Canada must improve its tax competitiveness to spur investment, address ongoing labour market challenges, and fuel economic growth, according to a pre-budget submission published last week by Canadian Manufacturers & Exporters (CME).

The report makes several recommendations to the federal government in advance of its 2013 budget, which include strengthening support for the Scientific Research & Experimental Development (SR&ED) tax credit, and adopting the Accelerated Capital Cost Allowance - also known as the two-year write-off for machinery and equipment - as a permanent part of the tax system.

"While the government has implemented a number of important tax measures in recent years, there is much progress to be made to ensure Canada is one of the most competitive tax jurisdictions in the world for companies to invest and grow," says CME President & CEO Jayson Myers. "For example, changes to the SR&ED program announced in the 2012 federal budget are a step in the wrong direction; and we are hopeful the government will review their negative impact on innovation performance, and industry as a whole."

The need for a higher-quality skilled workforce is another area of significant importance for manufacturers and exporters addressed in the submission. Growing labour shortages in specific sub-sectors of Canadian manufacturing require incentives for on-site training, and facilitating the hiring of workers from other jurisdictions.

"The government should further support workplace training by providing an employers' training tax credit, and streamline the regulatory processes for companies to bring in foreign workers when needed," notes Myers. "While the procurement of new machinery and development of new markets are critical to business expansion, companies, essentially, require qualified labour to sustain business growth," he added.

To view all the recommendations included, you can find CME's complete pre-budget submission here.

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