4 June 1999

Government Proposes to Extend Deadline for Tax Relief to Small Businesses for Year 2000 Compliance

On 2 June the Minister of Finance, the Honourable Paul Martin, PC, MP, announced that the government is proposing to extend the deadline for the acquisition of computer equipment eligible for tax relief from 30 June 1999 to 31 October 1999. This will be of benefit to small- and medium-sized businesses in addressing the year 2000 issue. This initiative falls within the wider context of the government's response to the year 2000 challenge under the joint coordination of Treasury Board President Marcel Massé and Industry Minister John Manley.

Originally announced on 11 June 1998, the program provides accelerated capital cost allowance deductions of up to $50,000 to small- and medium-sized firms that acquire computer hardware and software to replace systems that are not year 2000 compliant. This will allow smaller firms to deduct 100 per cent of eligible expenditures in the year in which they are incurred.

An extension of the deadline to qualify for the tax relief measure was one of the recommendations made by the House of Commons Standing Committee on Industry in its report of 31 May 1999. Although many firms have taken action to ensure that their computer systems will be ready for the year 2000, some have still not addressed this important issue. The extension to 31 October will give small- and medium-sized firms more time to assess their year 2000 readiness and take any needed action.