Accelerated expensing, FCC legislation promised in Liberal mini-budget that faces uncertain future

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Amidst the chaos of Finance Minister Chrystia Freeland’s shocking resignation and the headlines highlighting the deficit ballooning to nearly $62 billion, there were a few notable measures for the agriculture sector in the Fall Economic Statement tabled by House Leader Karina Gould on Monday afternoon.

There’s a huge caveat surrounding much of what’s in the mini-budget, as the Liberal government faces an uncertain future with a growing list of MPs calling for their leader’s resignation as they head home for Christmas on Tuesday. The House of Commons was already dysfunctional and stuck in a stalemate, unable to pass new legislation, for most of the fall session.

That being said, at first glance, the Fall Economic Statement included the following commitments that would be relevant for farms and agribusiness, if or when they come into force:

  • Extension of the Accelerated Investment Incentive, which allows for accelerated depreciation and expensing of machinery and equipment. The government started a four-year phaseout of the incentive this year, with a plan to eliminate it by 2027. The FES on Monday included a commitment to re-instate it and extend the measure through 2029, with a four-year phase-out between 2030 and 2033. The government estimates this would add up to $17.4 billion in foregone tax revenue.
  • Amendments to the Farm Credit Canada Act would be introduced to bring the legislation in line with the updated mandate for FCC and other Crown lending corporations that was announced in the federal budget back in spring to take on greater risk to drive business growth.
  • Changes to the Canada Carbon Rebate for Small Businesses to provide slightly larger cheques to small businesses. Businesses that have between 1 and 20 employees would qualify for a payment amount that is equivalent to having 20 employees, essentially raising the base payment.
  • Several measures aimed at improving interprovincial trade including:
    • publishing a list of specific, restrictive measures that each province and territory has in place that are preventing trade within Canada;
    • to look at applying conditions on major federal transfers to provinces and territories requiring the elimination of specific barriers to interprovincial trade and labour mobility;
    • a review of the Canadian Free Trade Agreement;
    • $4.3 million over three years, starting in 2025-26, to the Canadian Food Inspection Agency
      to “advance mutual recognition in the agriculture and agri-food sector and support businesses in building capacity to meet federal regulations and expand trade across the country.”
  • $43.8 million over two years for operations of the Hudson Bay Railway to Churchill
  • Additional tariffs on China — the Fall Economic Statement included the formal announcement of Canada’s intent to impose tariffs on certain solar products and critical minerals from China in early 2025, as well as tariffs on semiconductors, permanent magnets, and natural graphite from China beginning in 2026.
  • Strengthened retaliatory mechanisms for trade — the government says it intends to make legislative amendments to the Export and Import Permits Act that would allow it to restrict trade in response to actions from another country “that harm Canada or to create more secure and reliable supply chains.”
  • A reciprocity requirement for trading partners is to take effect immediately. In other words, the government says trading partners should grant Canadian businesses the same access that their companies enjoy in Canada. “This approach will be applied to a range of new measures including, but not limited to, government procurement, including subnational infrastructure spending, investment tax incentives, grants and contributions, technical barriers to trade, sanitary and phytosanitary measures, investment restrictions, and intellectual property requirements,” says the FES.
  • Consultations on border carbon adjustments to continue, as the government says it’s engaging with stakeholders for input in “the ongoing consideration of potential measures to address high-emissions imports,
    including Border Carbon Adjustments and emissions standards.”

You can read the entire 279 page document for yourself, here.

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