Will new tax incentives unleash business investment in Canada?
The Growth Lens by Scotia Growth InstituteShow Notes
As part of a push to spur new business investment in Canada, Prime Minister Mark Carney announced the new Productivity Mega Deduction at the Canada Investment Summit. This proposed new tax incentive would apply to more than 65% of capital assets and allow eligible businesses to immediately deduct qualifying investments, effectively lowering the after-tax cost of investing.
In this episode of The Growth Lens by Scotia Growth Institute, Jean-François Perrault, Senior Vice-President & Chief Economist, speaks with Ravina Bains, Senior Vice President & National Head, Mid-Market, Canadian Commercial Banking to break down whether these changes could fuel meaningful growth in the Canadian economy as well as how the tax changes could affect decisions for the country’s businesses.
They also discuss which businesses might benefit most, how factors like business confidence and access to capital could affect the success of the new measures, and how this all fits into Canada’s bid to boost its international competitiveness and improve productivity.
Key moments:
00:01:27 – JF provides an overview of Canada’s recent economic issues that prompted recent policy proposals 00:02:59 – JF’s main takeaways from the measures announced at the Canada Investment Summit 00:04:45 – JF explains how these changes affect our competitiveness relative to other G7 nations 00:05:24 – Ravina on the ‘cautiously positive’ reaction she’s seen from businesses 00:06:41 – Ravina explains the practical impact the changes could make for businesses looking to invest 00:08:13 – Ravina identifies which businesses and sectors could benefit most 00:09:09 – How these changes could impact Canada’s broader economic situation in JF’s view 00:09:53 – The importance of business sentiment in investment decisions, even with new deductions 00:11:43 – Ravina on how these changes address longstanding issues Canadian businesses have faced and what else is needed 00:12:36 – How investment readiness will impact business outcomes in coming years 00:13:02 – How Ravina sees the new tax measures fitting into wider strategic decisions for businesses 00:13:51 – JF on whether the Productivity Mega Deduction will really boost productivity 00:14:59 – What other factors JF thinks are necessary for the new measures to succeed 00:16:06 – Ravina’s main takeaways for businesses in Canada 00:16:58 – JF’s biggest takeaway from the proposed deduction
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