Finance Minister Jim Flaherty announced $1.4 billion in tax relief for Canadian manufacturers as promised in the last federal budget during a news conference at a manufacturing plant in Brampton, Ont., on Wednesday.
"This is a two-year extension of the temporary accelerated capital cost allowance for new investments in machinery and processing," Flaherty said.
The finance minister said the 50% straight line depreciation rate was being extended to include investment in eligible manufacturing or processing machinery and equipment in 2014 and 2015.
Flaherty noted that 25,000 businesses in Canada used the the accelerated capital cost allowance to write-off the purchase of new investments and machinery since the federal government first introduced the measure in 2007.
The growth in investment of new machinery and equipment in Canada grew from over 11% in 2010, to 24.8% in 2011, Flaherty said.
The finance minister said the purpose of this and other tax measures introduced by the Harper government, "is not to help corporate Canada — as much as it's important to do that."
"It's all about jobs, it's all about work, it's all about families… it's all about your children and my children, and the opportunities they will have in the future," Flaherty said.
Jayson Myers, the president and CEO of Canadian manufacturers & exporters – the country’s largest trade and industry association – welcomed the new measure saying it "will make Canadian manufacturers more cost-competitive."
The manufacturing industry employ 1.8 million Canadians, Flaherty said.
The finance minister was joined by Veterans Affairs Minister Julian Fantino and the Minister of State for Sport Bal Gosal. Other Ministers and government MPs are making similar announcements across the country today.
Following the announcement, Flaherty was asked whether the federal government would sell the remainder of its shares in General Motors.
One week ago, the federal government and Ontario sold a block of 30 million shares in GM valued at $1.1 billion.
The governments now hold more than 119 million common shares in GM.
Flaherty indicated he was in no rush to sell saying, "We don't want to be in private enterprise, I don't think the taxpayers of Canada want to be involved in private enterprise. On the other hand, we want to get the best return we can for Canadians from the shares we have in General Motors."
"We will time our sales to maximize the return, " Flaherty said.
The finance minister was also asked if he shared in the Bank of Canada governor's outlook of the Canadian economy.
Stephen Poloz told members of the Vancouver Board of Trade on Wednesday the Canadian economy is close to a "tipping point" that will usher in an era of more normal growth.
"I see that some of the experts have said that our economy will grow more than we predicted — I hope they are right but we rely on the estimates that we make and we budget on that basis."
Flaherty said his outlook was "reasonably optimistic."