Mr. Speaker, the hon. member's question is excellent and it is worthy of some kind of debate. It is always of concern to the federal government as to whether our capital cost allowances are in line with our major competitors.
I would argue with the hon. member that the Government of Canada has responded in large part to the finance committee's report, specifically in one unique area.
Let me set it up first by saying that we are always looking at ways in which Canadian companies can be more competitive. We are always looking at whether our corporate tax rates are in fact competitive. Currently, Canada has a slight advantage over the Americans in terms of our corporate tax rate. Budget 2005 tries to maintain that slight advantage by reducing the corporate tax rate from something in the order of 21% down to 19%.
The other area is where the hon. member is in fact correct. What is important to a corporation is not only its tax rate on its income, but also its ability to write off assets.
I would like to direct the hon. member's attention to budget 2005, in particular the accelerated write-off rates with respect to capital cost allowance for environmentally friendly technology. This is a specific example where the government has gone away from the useful life concept, that is how long will this particular asset last in a normal working circumstance, to an accelerate write-off.
The government has said on pages 182 and 183 in budget 2005, for a particular public policy reason, that capital assets used for environmentally friendly technology will enjoy an accelerated write-off, much like it did in 2004 budget when we said computer technology assets did not reflect the useful life of those assets. Therefore, accelerated the time that corporations could write them off.
In budget 2005, I point the hon. member to page 183 concerning class 43.1 assets. These assets include wind turbines, electrical generating equipment, small hydroelectric facilities, stationary fuel cells, photovoltaics and equipment powered by waste fuels, equipment that recovers biogas from landfill and equipment used to convert biomass into bio-oil. We can see the government's thinking on a matter such as that, which is to encourage industry to invest in those kinds of assets and put the necessary capital into those kinds of assets in order for energy to be generated from what are effectively environmentally friendly sources.
The government has responded to the very issue that the hon. member raises. The issue he raises is an important and has in large measure been responded to in budget 2005 in a specific area.