Pfizer pitches Canada for tax breaks in upcoming budget
OTTAWA -- Pfizer Canada is pitching the federal government to bring in new tax breaks and change related corporate tax policies, suggesting the feds need to do more to incentivize pharmaceutical companies to invest domestically in a post-pandemic world.
Specifically, Pfizer is proposing that in the upcoming federal budget, the government “maintain or reduce corporate income tax rates,” and offers a series of suggestions of ways to do so.
The company suggests that the federal Liberals provide certainty about how Canadian tax rules, regulations, and policies will be “fair, clear and predictable,” particularly in how they apply to scientific research and development as well as contract manufacturing.
Pfizer also wants to see Canada:
- Improve existing legislative tax measures such as increasing the Manufacturing & Processing (M&P) credit which decreases the federal corporate income tax rate;
- Repeal or postpone the planned phasing out of the Accelerated Investment Incentive beyond 2023, which offers tax relief on newly-acquired eligible property assets; and
- Expand eligibility to certain tax credits so that they are refundable to multinational enterprises, not only to Canadian-controlled private corporations.
The company makes the case that a strong pharmaceutical sector can play a role in Canada’s economic restart and recovery post-pandemic but in order for that to happen, the government has to create a “fertile and hospitable environment” to retain and attract that investment.
It also notes that Canada will be competing for that investment with other countries who are implementing tax policies that attract manufacturing, research and development facilities looking to set up new locations and offer high-skilled and well-paid jobs.
The policy recommendations are detailed by the Canadian arm of the international pharmaceutical giant, in a pre-budget submission provided to the House of Commons Finance Committee.
“Pfizer and others in the health and life sciences industry have been at the forefront of fighting the COVID-19 pandemic in Canada, we also wish to be at the forefront of helping with the economic recovery,” said Pfizer Canada President Cole C. Pinnow in the submission.
“Improvements to tax incentives cannot, alone, succeed in retaining and attracting economic activity in the healthcare sector but they are important building blocks. The overall business environment must be attractive, including clear and predictable tax outcomes.”
The pre-budget submission was one of 792 different pitches from various stakeholders, corporations and business people, offering their perspective to federal policymakers as to what should, or shouldn’t be included in the upcoming 2021 federal budget.
Pfizer’s submission was published by the committee on Nov. 21, 2020, before the Pfizer-BioNTech vaccine was granted Health Canada regulatory approval. Since then the federal government has been in ongoing discussions with Pfizer about its vaccine delivery schedule.
That schedule was recently interrupted by Pfizer, and is leaving Canada without any new doses arriving next week. It’s thrown the national rollout off track, though the company has made assurances that it’ll soon make up for the temporary shortages.
In a statement, Pfizer Canada spokesperson Christina Antoniou said that beyond the pre-budget submission, the company “has never engaged with anyone in the Federal Government on the tax policy matters referred to in our submission,” nor had the submission been discussed during any conversations about the COVID-19 vaccine.
Antoniou said that Pfizer felt it was important to offer their perspective on what measures the federal government could take to help restart the economy, which was the question that the committee had solicited feedback on.
According to the Finance Committee’s website, no submission has been received from Moderna, the second pharmaceutical giant to have its COVID-19 vaccine approved for use in this country.
Receiving and scrutinizing pre-budget submissions are a routine aspect of the work done by the committee. Ahead of every federal budget the members hear from often hundreds of witnesses during dozens of committee hearings or as part of written proposals.
The committee then compiles what it’s heard and that’s submitted to the finance minister and other federal officials who are in charge of crafting the federal budget to inform their consideration.
The upcoming 2021 federal budget will be presented by Deputy Prime Minister and Finance Minister Chrystia Freeland. It’ll be the first formal budget presented by the Liberals since 2019, after the 2020 version was postponed and then ultimately not completed, citing the unprecedented economic uncertainty and spending resulting from the ongoing COVID-19 crisis.