Canadian Government Providing Assistance to Businesses in All Sectors to Invest in Computers

After going through all of the budget information I have pulled out the things that stand out for the small business, There is some much information on so many different pages, I have put together a run down of what I have found so far.

The full list from the Government of Canada is here.
Supporting Small Businesses

Entrepreneurs and small businesses contribute to Canada’s economic success by creating jobs and generating economic activity in Canadian communities.

Small businesses are dynamic and drive economic growth and job creation. Budget 2009 supports their growth by:

* Increasing the amount of small business income eligible for the reduced federal tax rate of 11 per cent to $500,000 from the current limit of $400,000 as of January 1, 2009.
* Increasing access to credit for small businesses through proposed amendments to the Canada Small Business Financing Program and the Business Development Bank of Canada.
* Providing $30 million over two years for the Canada Business Network and $10 million to the Canadian Youth Business Foundation.
* Allocating $200 million over two years to the National Research Council’s Industrial Research Assistance Program to enable it to temporarily expand its initiatives for small and medium-sized businesses.

Reducing Taxes for Small Businesses

Canada’s federal income tax system supports the growth of small businesses through a lower tax rate on the first $400,000 of qualifying income earned by a Canadian-controlled private corporation. The lower tax rate helps these small businesses to retain more of their earnings for reinvestment and expansion, thereby helping to create jobs and promote economic growth in Canada.

The Canadian Federation of Independent Business (CFIB) has emphasized to the Government the economic importance of helping small and medium-sized businesses to grow. To further support the growth of small businesses, Budget 2009 proposes to increase the amount of small business income eligible for the reduced federal tax rate of 11 per cent to $500,000 from the current limit of $400,000, as of January 1, 2009.

It is estimated that this measure will cost $45 million in 2009–10 and $80 million in 2010–11.
Fostering Entrepreneurship and Small Business Growth

To help create opportunities for young entrepreneurs, Budget 2009 provides $10 million to the Canadian Youth Business Foundation to support and mentor young Canadians who are creating new businesses.

To sustain existing small businesses and support their growth, Budget 2009 will increase access to credit through proposed amendments to the Canada Small Business Financing Program and the Business Development Bank of Canada that are referenced in Budget 2009’s section on improving access to credit and Canada’s financial system.

Budget 2009 also provides $30 million over two years for the Canada Business Network, which delivers single-window access to reliable, up-to-date, relevant information and tools to businesses.
Helping Small and Medium-Sized Companies Innovate

The National Research Council’s Industrial Research Assistance Program helps small and medium-sized enterprises innovate by providing technical and business advice, networking services, as well as direct, non-repayable, financial assistance. This program also provides companies with support to hire recent graduates from colleges and universities for up to one year to work on innovative business strategies and technology-related projects.

Budget 2009 provides $200 million over two years, starting in 2009–10, to the National Research Council’s Industrial Research Assistance Program to enable it to temporarily expand its initiatives for small and medium-sized enterprises. This includes $170 million to double the program’s contributions to companies, and $30 million to help companies hire over 1,000 new post-secondary graduates, including graduates from business schools, to implement more effective business processes and strategies, and develop new innovative products and services that companies can bring to the marketplace.
Providing Assistance to Businesses in All Sectors to Invest in Computers

Budget 2009 proposes a temporary 100-per-cent CCA rate for computer hardware and systems software acquired after January 27, 2009 and before February 1, 2011. In addition, the rule that restricts CCA deductions to one-half of the CCA write-off otherwise available in the first year will not apply to these computers.

This temporary measure will allow taxpayers to fully expense their investment in computers in one year. The measure will provide stimulus by assisting businesses to increase or accelerate investment in computers. It will also contribute to boosting Canada’s productivity through the faster adoption of newer technology. Businesses in all sectors of the economy, including the service sector, will benefit from this incentive.

It is estimated that this measure will cost $340 million in 2009–10 and $355 million in 2010–11.
What the Capital Cost Allowance is:

The capital cost allowance (CCA) system determines how much of the cost of a capital asset a business may deduct each year for tax purposes. The Government’s approach has generally been to set CCA rates so that the deduction for capital costs is spread over the useful life of the asset. This ensures neutral tax treatment for different types of assets so that investment is allocated to its most productive use. Budget 2009 proposes temporary increases in CCA rates for computers, and machinery and equipment used in manufacturing or processing, to provide economic stimulus and assist Canadian businesses during this challenging economic period.
Statement from The Honourable Diane Ablonczy, Minister of State (Small Business and Tourism)

The Honourable Diane Ablonczy, Minister of State (Small Business and Tourism) and the Honourable Denis Lebel, Minister of State (Economic Development Agency of Canada for the Regions of Quebec), highlighted a key initiative introduced in Budget 2009: Canada’s Economic Action Plan to stimulate the economy and help companies invest in new information technology: a temporary 100-percent capital cost allowance for computer purchases.

“Canada’s Economic Action Plan is a multi-year plan designed to stimulate the economy while protecting Canadians hit hardest by the global recession,” said Minister of State Ablonczy. “Our government is helping Canadian companies to make investments that keep our economy moving through a difficult period, and position themselves to come out of it more competitive in the future.”

“This is the kind of short-term, targeted tax relief that will help Canadian companies to get through this period of global uncertainty,” said Minister of State Lebel. “By setting a clear deadline for the program, we are ensuring that companies will act quickly, make critical investments and get our economy moving forward.”

“As our company continues to grow and add new clients, we must invest more in computers and hire more staff,” said Scott Murray, CEO of Organisation Metrics Inc. “By taking advantage of the budget provisions that allow us to offset 100 percent of the capital cost of new computers, we can invest more quickly in technology and also use the savings to hire more staff and enhance our marketing, to fuel even more growth.”

“This measure is an important step to ensuring that Canada’s small and medium-sized businesses are able to innovate, compete and grow in recessionary times,” said Michael Tinkler, Chair of the Board for Certified Management Accountants of Canada.

Canada’s Economic Action Plan proposes a temporary 100-percent capital cost allowance (CCA) rate for computer hardware and systems software acquired after January 27, 2009, and before February 1, 2011. In addition, the rule that restricts CCA deductions to one half of the CCA writeoff otherwise available in the first year will not apply to these computers.

This temporary measure will allow taxpayers to fully expense their investment in computers in one year. The measure will provide stimulus by assisting businesses to increase or accelerate investment in computers. It will also contribute to boosting Canada’s productivity through the faster adoption of newer technology. Businesses in all sectors of the economy, including the service sector, will benefit from this incentive.

More information on these and other measures in Canada’s Economic Action Plan, a plan to stimulate the economy and protect those hit hardest by the global recession, can be found at
http://www.budget.gc.ca/2009/home-accueil-eng.asp

Contacts:
Office of the Honourable Diane Ablonczy
Minister of State (Small Business and Tourism)
Catherine Godbout
613-947-5856

PDF

Supporting Small Businesses

Small businesses are dynamic and drive economic growth and job creation. Budget 2009 supports their growth by:

* Increasing the amount of small business income eligible for the reduced federal tax rate of 11 per cent to $500,000 from the current limit of $400,000 as of January 1, 2009.
* Increasing access to credit for small businesses through proposed amendments to the Canada Small Business Financing Program and the Business Development Bank of Canada.
* Providing $30 million over two years for the Canada Business Network and $10 million to the Canadian Youth Business Foundation.
* Allocating $200 million over two years to the National Research Council’s Industrial Research Assistance Program to enable it to temporarily expand its initiatives for small and medium-sized businesses.

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One Response to Canadian Government Providing Assistance to Businesses in All Sectors to Invest in Computers

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