Canadian Budget A Mixed Bag For Manufacturers

As The Wall Street Journal reported, Canadian Prime Minister Justin Trudeau’s annual budget would increase capital gains taxes on the country’s corporations and wealthier taxpayers. Specifically, the outline would raise the rate on annual capital-gains realized above C$250,000 from one-half to two-thirds. The higher rate is scheduled to take effect June 25.

While that policy certainly would affect executives’ ability to invest in their companies, the budget news was not all bad. The budget document, available here, also expands the Clean Technology Manufacturing investment tax credit to include critical minerals production and it introduces a 10 percent Electric Vehicle Supply Chain investment tax credit.

According to Canadian Manufacturers and Exporters, the budget also would:

• Allot additional resources to the Canada Border Services Agency to create a dedicated Market Watch Unit to monitor unfair trade practices and update trade remedy measures annually;
• Provide $600 million over four years, and $150 million every year after that, for enhancements to the Scientific Research and Experimental Development tax credit;
• Offer $2.4 billion in targeted support, including $200 million over five years, to help accelerate artificial intelligence adoption in critical sectors like manufacturing; and
• Support modular and prefabricated manufacturing, including $500 million for an Apartment Construction Loan Program, to provide low-cost financing for new apartments that use, among other things, prefabricated homebuilding techniques.

Read more about the economic policy provisions included in the budget here.