Canadian Trucking Alliance [CTA]
Canadian Truckers Receive Accelerated CCA Rates for Equipment
Toronto, Ontario – The Fall Economic Fall Statement delivered an early Christmas present for the Canadian trucking industry in the form of significant accelerated cost allowances for tractor/truck capital; an emphasis on further harmonizing trucking regulations; enhancements to major western trade corridors to the United States as well as intermodal connectivity improvements.
Under the newly created Accelerated Investment Initiative (AII), capital investments will generally be eligible for a first-year deduction for depreciation equal to up to three times the amount that would otherwise apply in the year an asset is put in use. The typical asset deduction for the first year for trucks is 20 per cent, which will now increase to 60 per cent under this proposed measure.
“Tripling the current first-year rate will provide trucking companies in Canada a true incentive to make capital investments in newer equipment, which will in turn make the supply chain more productive and reduce its carbon footprint,” said Stephen Laskowski, President of the Canadian Trucking Alliance. “Minister Morneau should be applauded for showing this leadership and recognizing the economic importance of our sector by creating greater re-investing opportunities for small and large operators alike.”
The Fall Economic Statement outlined the impact to the trucking industry: When a fleet purchases five trucks for a total of $1 million, under the current deduction system only $200,000 could be written off in the first year compared to $600,000 under the AII system. As outlined in the Fall Statement, this change represents about $105,000 in federal-provincial tax savings for a fleet making such a purchase.
It is important to note that the AII will apply to qualifying assets acquired after November 20, 2018. Further clarification was provided to CTA by Finance officials. For the carrier to qualify for the AII deduction, the tractor would have to be legally theirs on or after November 20, 2018. The AII will be gradually phased out starting in 2024, and no longer in effect for investments put in use after 2027.
Recognizing the opportunity that internal trade represents, the Fall Economic Statement reaffirms the federal government’s commitment to strengthening freer trade within Canada and proposes the federal government work with provincial and territorial partners to accelerate action to remove regulatory and other barriers in four areas, including within the trucking industry.
The Fall Economic Statement says that 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 Fall Statement went on to say that trucking regulations will be a key part of the Regulatory Reconciliation and Cooperation Table as well as focusing attention on the CCMTA process.
CTA welcomes the attention and focus on our sector to improve efficiency of truck movements and public safety,” said Laskowski.
Moving Goods to Market Efficiently in Saskatchewan and British Columbia
Two transport infrastructure announcements were contained in the Fall Economic Statement:
$167 million for port and rail infrastructure in Vancouver to increase efficiency and capacity for trade;
$53.3 million to upgrade Highways 6 and 39 between Regina and Estevan, near the United States border.
CTA welcomes investment into our major trucking-trade touch points. The Saskatchewan project, specifically, was identified by the Saskatchewan Trucking Association in CTA’s 2018 Infrastructure Priority document released earlier this year and shared with the federal government.☚