OTTAWA, Jan. 27 /CNW/ - The Society of Management Accountants (CMA
Canada) is pleased that Budget 2009 adopts a number of measures based on its
recommendations to the federal government in pre-budget submissions to
increase productivity, fuel innovation and boost competitiveness.
These measures are:
- A 100% write-off for business purchase of computers and software over
the next two years;
- Increasing the small business tax rate threshold from $400,000 to
"These measures and others introduced in today's federal budget are
important steps to ensuring Canada's small and medium businesses (SMEs) are
able to innovate, compete and grow in recessionary times," said CMA Canada
immediate past Chair and budget analyst Richard Monk, C.Dir, CFE, CMC, CMA,
FCMA. "When large corporations lay off thousands of workers, many of these
people form their own businesses.
"It is vital that the Canadian government do everything it can to ensure
small and medium businesses succeed and grow and that includes getting the
equipment they need and benefitting from tax rates that provide a competitive
advantage," said Mr. Monk. "This not only keeps Canadians working, but as
other countries introduce stimulus programs, it positions us in the best
possible way to come out of the recession as an economic leader."
In a number of pre-budget consultations, CMA Canada recommended the
government establish a special capital cost allowance (CCA) rate in
information and communications technology (ICT) to encourage businesses to
invest more in ICT and make them more competitive. A further recommendation
was to implement a refundable Information and Communication Technology (ICT)
Tax Credit for small and medium-sized businesses as recommended by the
government's Telecommunications Policy Review Panel in 2006.
CMA Canada believes that increased adoption of ICT is closely associated
with innovation, which is one of the key drivers of productivity. With
Canada's lagging productivity record and in the face of a weakening economy it
is essential that measures be taken to stimulate innovation.
By introducing a temporary 100% capital cost allowance for computers and
software purchased by businesses in the next two years, the government
acknowledged the measure "will contribute to boosting Canada's productivity
through faster adoption of newer technology." However, CMA Canada cautions
that the 100% CCA approach still means businesses which need the measure the
most - those which are not yet profitable - cannot benefit. "The government
needs to continue to look at ICT measures which will benefit these companies,"
said Mr. Monk.
CMA Canada also recommended to the government in 2007, that it increase
the small business tax rate threshold from $400,000 to $500,000 qualifying for
the reduced federal tax rate of 11%, encouraging small business owners to
reinvest in their own businesses, including ICT investment.
This year's budget adopts that measure in its entirety, stating "the lower
tax rate helps these small businesses retain more of their earnings for
reinvestment and expansion."
CMA Canada is also pleased that the government remains committed to
another of its recommendations, being proactive in the harmonization of
provincial and federal sales taxes in all provinces. To achieve this in the
remaining five provinces - British Columbia, Saskatchewan, Manitoba, Ontario
and Prince Edward Island - would result in businesses in those provinces
becoming much more competitive.
While we are encouraged by these measures, there are still a number of
steps the government can take for businesses to further stimulate the economy,
increase innovation and boost productivity," said Mr. Monk.
For instance, while a number of government-funded retraining and
apprenticeship programs were introduced in the budget, CMA Canada still
believes more could be done to encourage businesses to upgrade the skills of
their workforce to improve labour productivity and boost innovation.
To that end, CMA Canada continues to recommend that the government:
- Introduce a refundable 150% investment tax credit up to $10,000 per
worker per year to encourage businesses to have workers upgrade their
ICT skills and increase competitiveness.
- Raise the lifetime capital gains exemption to $1 million from $500,000
as an incentive for business investment and expansion.
About CMA Canada
With 40,000 certified members around the world, CMA Canada grants a
professional designation in strategic management accounting(TM) and is
responsible for standards-setting, accreditation and the continuing
professional development of CMAs. CMAs provide an integrating perspective to
business decision-making, applying a unique blend of expertise in accounting,
management and strategy to identify new market opportunities, ensure corporate
accountability, and help organizations maintain a long-term competitive
advantage. To optimize the performance of global enterprises and build
strategic management accounting(TM) skills, CMA Canada offers innovative
executive development programs, advanced online courses, and internationally
recognized knowledge management publications. For more information, visit
For further information:
For further information: or to arrange an interview with Mr. Monk,
please contact: Stuart McCarthy, Bluesky Strategy Group (for CMA Canada),
(613) 241-3512 ext. 225, Cell: (613) 762-4321,
firstname.lastname@example.org; Cindy Mantione, Communications Officer, CMA
Canada, (905) 949-3116, Toll-free: 1-800-263-7622 ext. 3116,