Mike Holden, CME’s Chief Economist, discusses Canada’s trade competitiveness at Senate Committee on behalf of Canadian manufacturers.

A letter was sent to the Minister of Finance, the Honourable William Morneau on behalf of CMC providing an outline of our joint priorities regarding the upcoming federal budget.

On behalf of the thousands of members of the undersigned associations, we are writing to you regarding the upcoming federal budget and to request a meeting with you to discuss business investment, productivity and growth in Canada as it relates to the manufacturing sector which includes chemical and food processors, machine and engineering fabricators, component and finished product manufacturers, assemblers, and metal and natural resource refiners.

Similar to the US, we believe that Canada and its provinces should be looking at a range of tax reforms to boost investment and growth. These reforms should include:

1. Reducing federal and provincial general corporate taxes to a combined 20 per cent.

2. Expanding and improving the Accelerated Capital Cost Allowance (ACCA) depreciation rules to mirror the new US rules.

3. Introducing an Investment Tax Credit on purchases of new equipment and software of between 10 and 15 per cent to help companies, especially SMEs, improve cash flow and offset the impact of the low Canadian dollar on the cost of buying foreign machinery and equipment.

4. Introducing a “patent box” innovation support that would reduce taxes on profits from new products and product mandates.

5. Lowering the top marginal personal income tax rate from 33 per cent to 31 per cent.

6. Reforming the Scientific Research and Experimental Development (SRED) program to lower the administrative burden and support a broader range of corporate innovation needs, especially product commercialization.