National Aftermarket Association Identifies Federal Budget Highlights

Canada’s Conservative Party government’s first majority budget, released by Minister of Finance Jim Flaherty, was titled “Jobs, growth and long term prosperity.” The Automotive Industries Association (AIA) of Canada is reviewing the budget announcement for issues that will or may affect the automotive aftermarket industry.

The budget outlines that the government’s focus will remain on an agenda that will deliver high-quality jobs, economic growth and sound public finances.

Among the areas AIA will be closely following in the Budget will be items related to environment, transportation, trade, health care, job creation and support for small-to-medium size enterprises (SMEs).

Here are some preliminary highlights from the Budget that AIA Canada believes could be of interest to its members:

• Support for small and medium-sized businesses and their workers by making EI premiums more stable and predictable, with annual increases limited to five cents.

• Extending the Hiring Credit for Small Business for one year to help small businesses to defray the costs of hiring new workers.

• Reducing red tape through the “One-for-One” Rule and implementing the Canada-United States Action Plan on Regulatory Cooperation.

• $110 million per year will go towards to the National Research Council to double support to companies through the Industrial Research Assistance Program.

• $14 million over two years to double the Industrial Research and Development Internship program.

• $67 million in 2012-13 as the National Research Council refocuses on business-led, industry-relevant research.

• Deloitte in its 2012 Budget Highlights noted that, “Changes are proposed for the Scientific Research and Experimental Development (SR&ED) tax credit system. The non-refundable credit is being reduced, the proxy percentage is being reduced and capital expenditures will no longer be eligible for SR&ED treatment.”

Over the coming days, on behalf of its members, AIA will be identifying opportunities within the budget where the automotive aftermarket industry can assist the Government of Canada in achieving its economic, environmental and health objectives.

Members may click on http://www.deloitte.com/view/en_CA/ca/services/tax/tax-publications/b50f130d5ff36310VgnVCM2000001b56f00aRCRD.htm to review Deloitte’s 2012 Budget Highlights.

The complete budget can be found at http://www.budget.gc.ca.