Comment 74248

By Chevron (anonymous) | Posted February 12, 2012 at 07:00:43

If this $5-million is seen as a subsidy, we should not see it as one that went to Electro-Motive Diesel, for two reasons:

1. The benefits of the $5-million were split between the purchasers of locomotives and the manufacturers.

2. The benefits that went to manufacturers went to all manufacturers, regardless of their location. If a Canadian company bought a locomotive from the GE plant in Erie, Pa., they were eligible for the higher CCA rate. Much of this subsidy, in fact, would have gone to locomotives produced outside of Canada, as Electro-Motive has only a 30 per cent North American market share in diesel locomotives.

The notion that Electro-Motive was given a $5-million tax break or subsidy to create jobs in Canada simply does not hold up to scrutiny. We need to put this myth to rest.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/the-economists/the-5-million-electro-motive-subsidy-that-wasnt/article2329659/

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