OTTAWA, Ont.–Conservative finance minister, Jim Flaherty’s first federal budget features tax relief, and priority on highway and border infrastructure.
For shippers and carriers alike there is corporate tax relief and a new highway and borders infrastructure fund.
For businesses the general corporate income tax rate will be reduced to 20.5% effective January 1, 2008; falling to 19% by 2010. The corporate surtax will be eliminated effective January 1, 2008. And, effective January 1st of this year, the federal capital tax is eliminated two years earlier than initially scheduled.
Small businesses will also see some additional relief starting next year the small business threshold will increase and the tax rate will go down.
Flaherty did not choose to eliminate the federal excise tax on diesel fuel a key and increasingly costly trucking business input, said the Canadian Trucking Alliance.
“Excise taxation on diesel fuel is an outdated, regressive form of taxation that is especially harmful in low margin businesses like trucking,” said CTA CEO David Bradley.
Excise taxes on fuel are not dedicated to any one purpose, but Bradley acknowledged that at least some of the money collected via excise taxes will find its way into the $2.4 billion, 5-year highways and border infrastructure fund announced in the budget.
According to Flaherty, “a great trading country like Canada must have the best in highway and border infrastructure.”
A key objective, said the minister, “will be to cost share with provinces and territories improvements to the core national system (something the minister referred to as “a very important national asset”), including the Trans Canada Highway.” The budget plan specifically includes an acknowledgement that 63% of Canada’s trade with the US moves by truck.
Also related to the borders, the government will allocate $100 million to “begin arming border officers and eliminating ‘work-alone’ posts”.
Another $303 million is earmarked to “implement a border strategy to promote the movement of low-risk trade and traffic within North America while protecting Canadians from security threats.”
One sector pulp and paper received accelerated CCA rates for investments in energy generation equipment that uses renewable energy like forest biomass, or uses fossil fuels more efficiently.
“In future budgets we hope to see the same sort of thinking applied to investment in the new, smog-free truck engines, and auxiliary equipment that will reduce greenhouse gas emissions and air pollutants,” said CTA’s Bradley in a release.