According to a Canadian Federation of Independent Business report says investment in machinery and equipment has gone down dramatically and turning that around could mean boosting productivity and enabling businesses to produce more of their goods and services at more affordable prices.

CFIB senior policy analyst for Western Canada, Bradlee Whidden, urges the provincial government to exempt investments in machinery and equipment from the PST, which he says is, “something most of the province’s already do, and Saskatchewan is one of the few that taxes these investments.”

The CFIB report says business investment in machinery and equipment in Saskatchewan has gone down from around $20,000 a year per private sector worker ten years ago to just under $12,000 in 2023. Machinery and equipment include everything from tools to tractors.

Whidden believes the drop in investment is exacerbating Canada’s productivity challenges, which already lags behind most G7 countries.
He says, “If we don’t improve our productivity and make it easier for businesses to equip workers with the tools and equipment, they need to be more efficient, Canada risks falling behind its global competitors, losing entrepreneurs to other countries, and worsening the standard of living for all Canadians.”

Other recommendations in the report:
– Reduce corporate income tax rates, allowing businesses to reinvest more of their income;
– Prioritize faster permitting, processing, and impact assessments for large infrastructure projects, especially in capital-intensive sectors like energy; and
– Increase transparency and reduce red tape by ensuring all exemptions to provincial sales taxes are listed comprehensively.