Thanks, Madam Chair.
Thanks to all the witnesses for being here.
Ms. Scoffield, I'll start with a few questions for you.
I'll start by saying I appreciated your opening remarks and your acknowledgement that the immediate expensing measure has been extended and made permanent, which I think is a good thing.
I take your point of how it impacts start-ups. Does it disproportionately impact or help other businesses that are larger?
It's interesting. I ran a company for many years. I advised start-ups for a living for quite a while. I understand that some of them would not have a tax burden early on. They probably don't have the revenues either, yet, just because an expense is able to be immediately claimed, it does not mean they have to do that. They can still depreciate any of those purchases of assets over a number of years and can claim it on future years. I wanted to add that in, because I think it's important for us to keep that in mind.
The initial immediate expensing measures did apply to IT networks, equipment and machinery, energy efficiency, research and development, and IP protection. Some of those, I think, would have applicability to start-ups. My colleague and I were talking about this after your comments, but start-ups also have other programs that can help them.
I think your question about the impact is a really good one. How do we measure the impact? When the productivity superdeduction was first introduced, we saw—within the first quarter, I think it was—a pretty large spike in new business investment in machinery and equipment. It went up 10%, and IP protection went up to 13%, which was significant, so the data showed that it was having an impact. I think seeing that it was impactful is part of what led to going further.
To your point, though, we should be measuring how effective it is. It's a costly measure, for sure, in terms of foregone tax revenue. How do you think we should measure it?