TORONTO, Ont. – The Canadian Trucking Alliance is calling accelerated capital costs allowances for tractors and trucks an “early Christmas present,” following this week’s federal economic statement.
The typical asset deduction for depreciation on trucks is increasing to 60% in the first year, up from 20%, under the new Accelerated Investment Initiative. A fleet that purchased five trucks for $1 million would traditionally write off $200,000 in the first year, compared to the $600,000 that could be written off today, the fall economic statement noted. That example represents $105,000 in federal-provincial tax savings for the fleet.
The Accelerated Investment Initiative applies to qualifying assets acquired after Nov. 20.
“Tripling the current first-year rate will provide trucking companies in Canada a true incentive to make capital investments in newer equipment,” said Stephen Laskowski, president of the alliance.
The change doesn’t last forever. The program is to be gradually phased out beginning in 2024, and end entirely after 2027.
It wasn’t the only announcement relating to trucking.
The federal government has also echoed an earlier commitment to reduce regulatory barriers in trucking.
“There is a patchwork of regulations and allowances that has resulted in several barriers for the trucking industry – including wide-base single tires, spring weights, and other restrictions … addressing these inconsistencies across Canada would improve transportation systems,” the economic statement reads.
The regulations are to be part of the Regulatory Reconciliation and Cooperation Table and focus attention through the Canadian Council of Motor Transport Administrators.
Trade-related infrastructure announcements included $167 million for port and rail infrastructure in Vancouver, and $53.3 million to upgrade highways 6 and 39 between Regina and Estevan.