Tuesday, 20 March 2007

Budget Question

I've never professed to understand money and federal budgets and business taxes but maybe someone could tell me if the following budget piece offers some potential good news for capital investment:
Manufacturing and processing businesses will be allowed to write off their capital investments in machinery and equipment acquired on or after March 19, 2007, and before 2009 using a special two-year, 50-per-cent straight-line rate.



  1. Tim,
    A corporation will be aloud to accelerated the asset depreciation. Normally, straight line depreciation is deducted from the income statement throughout the useful life of the asset.
    Usually when a business invests in an asset the value is spread over more than 2 years.
    Straight line depreciation is accelerated in this case providing an incentive to invest and reduce income tax payable. Losses can be deducted in future years too;)
    An incentive for large and small business to invest in the economy. After all I smell an election in the air.
    Hope that helps a little some?

  2. Thanks. I kind of thought that's what it meant. I wonder if it is enough to encourage Catalyst to invest a bit more than they have? After all, I kind of think that's the reason the government offered it. Like you said, election odor is in the air.