The weak U.S. housing market and the high-valued Canadian dollar, to one degree or another, are depressing activity levels in two of Canada’s most important sectors, forestry and manufacturing. This has led to clamours for government assistance. In fact, quite a number of aid initiatives have already been implemented, including those in last fall’s Economic Statement by the minority Conservative government in Ottawa and in the recent federal budget.

The following is a listing of the generic and specific measures that have already been established by the federal and provincial (mainly Ontario and Québec) parliaments.

(1) Loan guarantees, tax-free loans and outright subsidies for eligible companies;

(2) Accelerated write-offs for machinery and equipment investment;

(3) Cuts to unemployment insurance premiums;

(4) Assistance for road construction to remote sites;

(5) Electric power cost reductions;

(6) The elimination of “capital” taxes by 2012 in both Ontario and Québec;

(7) A reduction in the corporate income tax rate from 22% last year to 15% in 2012 by the federal government;

(8) The lowering of the Goods and Services Tax (GST), in two stages, from 7% to 5%, which is helping to promote sales;

(9) Financial assistance for one-industry towns that are in distress (i.e., in the forestry sector);

(10) Grants available for research and development in the auto sector;

(11) The provision of venture capital money for forward-thinking business plans and products; and

(12) Job-training funds available in new employment areas such as “eco-friendly” monitoring of business activity and “green” technology.

All of these initiatives add up to billions of dollars in government assistance.

(This report is based partly on an article by Jacqueline Thorpe appearing in the National Post on February 28, 2008.)

Alex Carrick

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