Tax changes important to keeping Canadian farmers competitive.OTTAWA—Farmers should be able to write off the cost of new equipment in the year of purchase just as their American competitors can, says Howard Mains, Canadian Public Policy Advisor for the Association of Equipment Manufacturers (AEM).The proposal echoes an earlier recommendation by the Canadian Federation of Agriculture to the Commons finance committee, which is gathering proposals for the 2019 budget.Increasing capital cost allowance rates to allow producers to more rapidly depreciate their equipment will encourage the introduction of new machines that increase productivity and profitability, Mains said during an appearance before the committee.Faster depreciation would provide “significant environmental benefit with cleaner, more fuel-efficient engine technologies, and improve operator safety given the new standards,” he said. Moving to 100 per cent first-year deductibility for investments in farm and construction would better align Canada with U.S. tax depreciation rates.Recent changes in U.S. depreciation rules “places Canadian farm families and small business owners at a competitive disadvantage,” he said. “The equipment that farmers buy today is priced on a global basis and their commodities that they sell is on a global basis as well. The prices are set in Chicago for all intents and purposes. A Canadian farmer when he's competing, he's competing against his competitor whether it be in Michigan or Iowa.”“A typical Canadian farmer who would buy a combine, say a $600,000 combine, in the first five years would be able to write off only 80 per cent of the cost of that acquisition, whereas his competitor in the United States who's selling corn and soybeans at the same price set in Chicago, they get to write that off year one.”Depreciation rules are very much a competitiveness issue, he said.Dan Kelly, President and CEO of the Canadian Federation of Independent Business, added his voice to the call for improved depreciation rules. Even if it is phase in over several years, small- and medium-sized firms would benefit and be optimistic, he said.Mains also called for an overhaul of the scientific research and experimental development tax incentive program. While the tax incentive is intended to encourage research and development in Canada, few companies use it “because the submission process is overly difficult and cumbersome. The cost effectiveness of the program has been diminished because of the administrative burden placed on applicants. Our recommendation is that the Canada Revenue Agency should be encouraged to root out the problems that discourage companies from using this program.”Poor rural broadband also hobbles Canada's agricultural competitiveness, he said. “Rural broadband deployment across the country does not meet the need of high-data transmission requirements of precision agriculture and other data-rich services deployed by farmers.” Increased funding for broadband Internet expansion in rural and remote areas is badly need as “we enter the next phase of farming, which is often referred to as Farming 3.0, precision agriculture, big data and artificial intelligence will be critical and revolutionary.“Technologies such as satellite image analysis, infield monitoring, real time cell-testing, plant by plant analysis, robots, and predictive analytics will be at the core of farming 3.0,” he said. “As Canadian farmers become more digitally advanced, data will be at the centre of the farm as these tools become more commonplace.“In this context, the government should continue to support technological development innovation, and rural broadband is a key tool for Canadian farm families to be totally competitive.”Alex Binkley is a freelance journalist and writes for domestic and international publications about agriculture, food and transportation issues. He's also the author of two science fiction novels with more in the works.