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Ontario budget extends ACCA win to province’s manufacturers

Published by Brad Fougere on April 23, 2015

Ontario Finance Minister Charles Sousa announced today that his government will extend the provincial Accelerated Capital Cost Allowance program for manufacturers, mirroring the federal government’s announcement from Tuesday as part of his provincial budget. Additional Jobs & Prosperity funding, renewed efforts to address skills shortages through labour market and training initiatives and infrastructure funding 

“We were pleased to see Ontario adopt our recommendation to extend the accelerated depreciation on manufacturing and processing equipment for 10 years,” said Ian Howcroft, vice president of CME Ontario. “This will help companies to continue to make the necessary investments to manage intense competitive pressures in an increasingly global manufacturing environment.”

Manufacturers will also benefit from $130 billion in announced infrastructure spending over the next 10 years, the $200 million increase in Jobs & Prosperity funding earmarked for strategic investments while introducing no previously unannounced tax on industry.

However, the budget lacked detail on the Ontario Retirement Pension Plan and while the recently announced Cap and Trade program was mentioned, no further particulars were included.

CME supports the government’s efforts to address skills shortages through various labour market and training initiatives. We will continue to advocate for initiatives to promote modern manufacturing to better address public perceptions and chronic skills shortages.

Infrastructure investments are also welcome and form a key part of a manufacturing strategy for Ontario. Modern infrastructure is critical for the efficient movement of people and goods, which is important for manufacturing and currently poses a significant lag on productivity. However, it will be critical for this money to be focused on the manufacturing sector where government can realize the most significant return on investment for Ontarians.  

CME, however, continues to call for an expanded definition and efforts to the offset the additional ORPP costs to manufacturers. Further solvency relief for private sector defined benefit plan sponsors is urgent as this is a significant cost for those manufacturers and a competitive disadvantage due to the rigidity of the rules governing such plans. 

Cap and trade remains a top priority for manufacturers and CME will continue to champion a balanced approach that will provide win-win solutions for business and policy makers. 

Some of the CME recommendations to lower the cost curve for manufacturers appeared in the budget, however, more must be done to address rising electricity costs in Ontario. As well, despite the higher costs, manufacturers are also reporting higher incidents of outages and other power quality issues that add significant cost to business.

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For more information, contact:

Ian Howcroft                                        Paul Clipsham

Vice President                                     Director of Policy

CME Ontario                                        CME Ontario

416-419-6119                                      416-388-6711

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