Supporting Alberta farmers and small businesses

The 2022 federal budget had an item in it that received little, if any, attention, but which will positively benefit small businesses and farmers across Alberta. That item is the extension of the accelerated capital cost allowance to unincorporated businesses such as sole proprietors. The measure, which applies for both Alberta and federal tax purposes, could generate hundreds of thousands of dollars in improved cash flow for businesses making large capital investments.

Canada’s accelerated capital cost allowance was changed in last year’s federal budget to allow Canadian-controlled private corporations to fully write off the cost of qualifying capital assets in the year of acquisition. Adopting the temporary expensing allows firms to immediately expense up to $1.5 million in new capital investment.

Alberta’s government quickly adopted these changes. While this was a significant benefit to many job creators in Alberta, we were disappointed that certain partnerships and sole proprietors were not included.

I reached out to federal finance minister Chrystia Freeland in May 2021 and strongly advocated for the federal government to extend these measures to unincorporated businesses, with support from Saskatchewan and Manitoba. I am pleased that Minister Freeland responded to our request and extended these provisions to unincorporated partnerships and sole proprietors.

The extension of the accelerated capital cost allowance will tangibly benefit the many small businesses and sole proprietors that have fought on throughout the pandemic. This also levels the playing field ensuring partnerships and sole proprietors benefit from similar capital asset treatment as Canadian-controlled private corporations.

Closer to home, this extension will help Albertan farmers, many of whom operate in unincorporated business structures. Extending the immediate expensing measure to proprietorships provides a material benefit to a wider range of operations that continue to make investments in their businesses, their communities and our economy.

This expansion of the accelerated capital cost allowance provision is a bright spot in a federal budget that is otherwise light on meaningful measures to promote business investment in Canada. It will encourage the accelerated adoption of technology and improve productivity, competitiveness and long-term wealth creation, which are critical for our future prosperity.