The Canadian Trucking Alliance (CTA) recently submitted its federal pre-budget recommendations,\u00a0many of which are designed to help spur\u00a0investment, support\u00a0the supply chain,\u00a0ensuring fair competition,\u00a0and increased overall productivity.<\/p>\n
One such measure\u00a0that fits with these themes\u00a0is the need to extend the Accelerated Investment Incentive (AII). This issue\u00a0dates back to the 2018 Fall Economic Statement, when the Federal Government\u00a0announced it would allow certain\u00a0capital investments, under the Accelerated Investment Incentive (AII), to be eligible for a first-year deduction for depreciation equal to up to three times the amount that would otherwise apply in the year an asset is put in use. Before the AII, the typical asset deduction for trucks the first year was 20 per cent, which was increased to 60 per cent under this initiative.<\/p>\n
When announced, this program was widely championed by CTA and the industry. By increasing the current first-year rate, trucking companies in Canada were given a true incentive and opportunity to make capital investments in newer equipment, which made the supply chain more productive and helped reduce its carbon footprint. Recognizing the economic importance of our sector by creating greater reinvestment opportunities for small and large operators alike has since proven to be an effective way to bolster the trucking sector\u2019s resiliency.<\/p>\n
However, these important measures are currently set to be phased out. The CTA is calling on the federal government to reinforce its commitment to helping the industry reinvest in the national fleet by:<\/p>\n
\u201cGiven the current economic climate, this is the exact time the federal government should be looking to spur business investment,\u201d said Jonathan Blackham, CTA Director of Policy and Public Affairs. \u201cWe think this is the kind of measure the federal government could use to help support businesses in our sector and across the economy.\u201d<\/p>\n
Investments in equipment and machinery across the board in Canada dropped over 15% in 2020 and\u00a0in many cases\u00a0spending has still not returned to pre-pandemic levels. Therefore, making these important changes is one of the surest ways the federal government can help companies turn the tide and invest, while also demonstrating its commitment to stated priorities like bolstering supply chain resiliency and the greening the national fleet.<\/p>\n
\u201cEven if the federal government does not agree this should be made permanent, at the very least, we\u2019d like to see it extended for at least another three or four years,\u201d says Blackham. \u201cAs we all know, many companies saw their investment plans put on hold, significantly altered, or outright scrapped with the onset of the pandemic in 2020. For many, these pressures, and disruptions lasted years and had a significant impact on companies\u2019 ability to utilize the Accelerated Investment Incentive. All we are asking is for companies to have a legitimate opportunity to use this important investment incentive before it is phased out.\u201d<\/p>\n