1. There is a variety of normal rates allowed industry, ranging from 2 per cent on reinforced concrete buildings to 50 per cent
on replacements of linen, china, glassware, cutlery, etc. Broadly speaking, however, the following might be considered as the normal rates of depreciation applicable to the general type of asset allowed industry: Buildings: concrete, 2 per cent; stone or brick, 2| per cent; wooden, 5 per cent; Machinery and equipment: 10 per cent. These rates applied in all years from 1937 to 1948. The regulations governing allowances in respect of capital costs for 1949 as provided in section 11 (a) of the Income Tax Act have not yet been published.
2. Under amendments to the legislation passed in 1940, the war contracts depreciation board authorized special or accelerated depreciation in respect of plant and equipment created for war purposes. Such allowances provided for the write-off of the whole cost in one or more years up to the estimated post-war value.
Also, in the year 1940, the War Exchange Conservation Act was enacted which provided for special depreciation allowances to companies who expanded production facilities primarily for increasing exports to the United States, or would increase the output of domestic resources the product of which would otherwise have been imported from the United States.
In 1944 the Income War Tax Act was amended by adding subparagraph (ii) to section 6 (n) which provided that depreciation at not more than double the rates normally allowed may be allowed.
Regulations under this clause are set out in orders in council P.C. 8640, dated the 10th of November, 1944, P.C. 2487, dated the 24th of June, 1947, and P.C. 3882, dated the 9th of September, 1948.
3. See No. 2 above.
4. See No. 2 above.
6. The provisions governing special and accelerated depreciation were introduced in 1940 and in 1944, as stated in No. 2 above. See also the booklet "Encouragement to Industrial Expansion in Canada" issued by the Department of Reconstruction and Supply.
Subtopic: SPECIAL OR ACCELERATED DEPRECIATION