capital

Businesses and organizations will soon be permitted to write off the full cost of certain capital investments for tax reasons.

The provincial government is making $8 billion available through a new Ontario Competitiveness Tax Cut program.

It will allow eligible businesses to immediately write off 100% of the value of investments that can include the installation of fibre-optic cable, software, aircraft and certain vehicles, patents, rail track, machinery and equipment, bridges and roads.

Finance Minister Peter Bethlenfalvy says it parallels a similar federal program.

“The effect of this, our economists believe, will create 30,000 new jobs,” says Bethlenfalvy.

“It will accelerate investment that would otherwise not happen. So this is additive. It’ll boost our economy. Our estimates are by about $6 billion.”

Bethlenfalvy says the measure is necessary in countering the impact of U.S. trade tariffs.

“Because for businesses, the cost of capital investments can be an important factor in deciding when and where to expand,” says Bethlenfalvy.

“Allowing immediate write-ups of these capital assets could help businesses modernize operations, adopt technologies and improve competitiveness, support expansion, strengthen supply chains and help businesses compete in new markets.”

The passage of federal legislation is required before the Ontario program can kick in.

The Finance Minister says he will have more details about the program during his Fall Economic Statement that he will read at Queen’s Park on Thursday.