Mr. Speaker, this is a follow-up question to one I had months ago with respect to capital cost allowance rates. It is a very specific thing, so for people observing this debate I want to explain what it is.
Capital cost allowance is a tax deduction for business related capital property and provides for the depreciation of these assets. The CCA rate is applicable to about 44 classes and is intended to reflect as closely as possible the useful lives of these assets. This rate essentially allows companies to write off their capital equipment at an accelerated rate. It allows them to turn over their equipment. There are two reasons, two large reasons I would argue, that we should improve this.
First, it makes companies more productive, more efficient, and puts our manufacturing sector on a level playing field. That is very important. One of the things the Conservative Party thinks needs to happen is an increase in our productivity here in Canada. The gap between ourselves and the United States has been increasing certainly over the past number years. As well there are the emerging economies, India, China, Brazil. We are very concerned in terms of our future standard of living.
The second reason is actually a stated goal of many Canadians, which would be environmental reasons. It allows companies to adopt newer technologies and newer equipment which is more environmentally friendly, and more energy efficient, which should certainly be a goal of the government.
This is in line with what the finance committee recommended. It was the 14th recommendation in the prebudget submission that:
The federal government revise Canada's capital cost allowance rates by 31 March 2005 such that they meet three criteria:
--similar asset classes are treated similarly;
--Canadian rates are similar to the rates for comparable asset classes in the United States and other countries; and
--Canadian rates reflect the useful life of the assets.
Moreover, the government should review these rates annually to ensure that they continue to meet the three criteria identified.
The government in its budget adopted some measures with respect to capital cost allowance rates, and we support those. They are limited, but we support those. I think the biggest one missing is to have a universal increase in the capital cost allowance rates, particularly for the manufacturing sector.
The Canadian manufacturers and exporters have called for this for a number of years, have argued very strongly for it. We need to support them. We need to support our manufacturing sector industries. They employ Canadians. Generally they pay very well. We need to have Canadians succeed in that sector.
I am calling on the government to adopt basically what was in the finance committee report and to change the capital cost allowance rates in the ways in which the Canadian manufacturers and exporters and other groups have called on the government to do.