OTTAWA — Even the titles are the same. The Conservative government’s 2007 budget blueprint echoes many proposals put forth in recent years by Canadian truckers, says the industry’s leading carrier group.

Finance Minister Jim Flaherty’s Advantage Canada is consistent with the Canadian Trucking Alliance’s recommended “Canadian advantage” policy of helping industries to better compete in a global economy through areas such as taxation, infrastructure, and regulation.

With regard to taxation and the economy, Advantage Canada resolves to reduce the general corporate income tax to 18.5 percent by 2011; investigate whether capital cost allowance (CCA) rates align with the useful life of assets and explore other opportunities to improve competitiveness, encourage investment and promote the neutrality of the tax system.

CTA hopes incentives in Ottawa’s next budget
help accelerate the purchase of new 07 engines

It would also consider opportunities to reduce tax distortions in areas where the tax system favors or impedes particular sectors and business structures or size; and encourage provinces to eliminate their capital taxes and “harmonize” retail sales taxes with the GST, or to adopt value-added taxes.

Similarly, a fixture of CTA pre-budget submissions has been the need to accelerate CCA rates for tractors to at least bring them in line with U.S. rates and to encourage quicker penetration of the new 2007 smog-free engines into the marketplace.

However, CTA chief David Bradley cautions that there is still some debate from a tax policy perspective over what the economic life of a truck is. “We may view the life of a highway tractor as much shorter than some in government and that can have a major impact on whether you believe the current CCA rates are appropriate or not,” he says.

CTA also stated that tax credits would achieve the same objective in terms of encouraging investment in new truck technology and could be used by the government as an environmental policy instrument. CTA has also argued that the federal excise tax on diesel fuel is an archaic, regressive form of taxation and is inconsistent with the way virtually all other business inputs are taxed. In addition, CTA supports the notion that value added taxation, preferably by harmonizing with the GST (as Quebec and three Atlantic Provinces have done) is a much more progressive way of taxing business inputs.

One issue not addressed in Advantage Canada, says CTA, is
the allowable meal tax deduction limit truck drivers can claim

An issue not specifically addressed in Advantage Canada, but which CTA feels is deserving of attention is the allowable tax deduction limit for meals that truck drivers are able to claim as business or employment expenses. CTA has long held that the 80 percent deduction limit for Canadian truck drivers should be restored as it will be in the U.S. by 2008.

Revenue Canada currently only allows truckers to claim up to 50 percent of meal expenses with receipts.

As expected Advantage Canada pays particular attention to the Windsor-Detroit border crossing by promising to continue working with the U.S., Ontario and Michigan as part of an ongoing binational planning process for a new crossing; define a financing strategy for this vital crossing in Budget 2007; and ensure the new crossing is in place by no later than 2013.

As TodaysTrucking.com reported earlier this month, Transport Minister Lawrence Cannon recently declared that Ottawa is likely to pursue a public-private partnership in financing and building a new bridge across the Detroit River.

“I have been one of those people who has been saying that the way things have gone in recent years, I would not be surprised if we did not see a new border crossing in Windsor for 30 years,” says Bradley. “I hope I am proven wrong, as this plan is very encouraging.”

Flaherty’s plan also touches on environmental sustainability and calls for efficient regulation using market-based instruments wherever possible, reports CTA. It aims to ensure that no sector bears a disproportionate cost, that regulation is complemented by cost-efficient, targeted initiatives, and that there are mechanisms in place to lever funding from the private sector and other levels of government.

Advantage Canada also urges support for the development and deployment of new environmental and energy technologies. “This appears entirely consistent with CTA’s recently released 14-point action plan for a Made in Canada Clean Air Act,” says Bradley.

Of course, he cautions: “This is just a plan. What we need is action starting with the 2007 budget.”