Eligible incorporated Alberta businesses are now able to fully write off the cost of qualifying capital assets in the year of acquisition, which will help encourage investment. Adopting the temporary expensing measure will allow firms to immediately expense up to $1.5 million in new capital investment.
This is expected to free up more than $100 million for Alberta job creators over the next several years, providing significant benefits to small and medium-sized businesses across a wide range of sectors.
While this is a significant benefit to many job creators in Alberta, the current federal proposal does not include businesses that are publicly traded or unincorporated. Jointly with the provinces of Saskatchewan and Manitoba, Alberta’s government has sent a letter to the Government of Canada advocating for this measure to be extended to unincorporated businesses, such as sole proprietors.
“The importance of paralleling this change is clear. This reflects our commitment to job creators of all sizes, in all sectors, whom we value greatly. We are proud to encourage and help facilitate private sector investment in the province. We will continue negotiating with Ottawa to establish a level playing field for all businesses and ensure job creators of all types can benefit from this important measure.”
“It’s encouraging to see the Alberta government committing to enhancing our competitiveness and investment attraction as we move into a period of recovery with the adoption of the accelerated capital cost allowance. This type of policy has an effective track record in Alberta of incentivizing short- and medium-term investments that increase both employment and productivity. This is a positive move for Alberta jobs, Alberta business and therefore the prosperity of Albertans broadly.”
“The opportunity to adopt this is wonderful news and an important step to rebuilding a strong economy post-pandemic. The ability to lean into growth opportunities based on redeploying capital enables companies like ours to continue to create jobs and further our investment in the community. It’s imperative that Alberta takes a progressive approach to supporting business and job creation, and this type of innovation supports just that.”
“Adopting this important change will be felt broadly across many sectors, but it would have a profound impact on many farmers. At a time when commodities are extremely strong and there is potential for overall sector profitability, this could accelerate that investment right when our economy could use a kick-start. Extending this measure would ignite local economies across the province, including rural, small-town Alberta.”
Tax measures build on previous initiatives
With the Job Creation Tax Cut fully in place and the Innovation Employment Grant now available, this new immediate expensing measure helps Alberta maintain its position as the best place in Canada to do business. In addition, this change will minimize red tape and provide more fuel to Alberta’s economic recovery.
Many Alberta businesses are also eligible for several relief measures related to COVID-19, including the expanded Small and Medium Enterprise Relaunch Grant (SMERG), which as of June 21 had provided about $600 million to nearly 90,000 applicants. Applications for SMERG will be open until June 30.
This is in addition to the billions of dollars in support provided to job creators since the start of the COVID-19 pandemic, including:
- Deferring corporate income tax filing and collection for six months, providing up to $1.5 billion in relief.
- Deferring education property taxes and freezing the rate at 2019 levels.
- Deferring WCB premiums and paying 50 per cent of them for small and medium businesses, saving businesses $350 million.
- Allowing lodging providers to keep tourism levy revenue they collected through a tourism levy abatement, providing approximately $44 million in support.
- Providing a 90-day deferral for utility payments last spring.
- Banning commercial evictions, rent increases and late fees for commercial tenants.
- Additional COVID-19 related supports have also been available through the federal government.
- The immediate expensing measure applies for eligible property acquired on or after April 19, 2021. The property must become available for use before 2024. This change builds on previous capital cost allowance measures implemented in 2018.
- Only Canadian Controlled Private Corporations, which tend to be smaller and medium-sized businesses, are eligible for the immediate expensing measure.
- Companies that are publicly traded and non-incorporated businesses are not eligible for this measure.
- Alberta believes sole proprietors should also have access to this measure, similar to their access to the 2018 CCA measures announced in the federal fall economic statement. Unincorporated businesses should not be excluded simply because of their legal structure. Alberta has raised this issue with the federal government and requested that they extend this measure accordingly.
- Alberta is also paralleling federal budget changes regarding the capital cost allowance treatment of clean energy equipment (classes 43.1 and 43.2).