SASKATOON – Record sales improvements in the farm equipment business for 1993 have dealers smiling. And they’re wiping their brows with relief after the government announced a guarantee of the 1992-93 small business investment tax credit (ITC) program on new equipment.
“ITC was the major factor in increasing our sales through the last two years but even without it I don’t see our sales dropping off in the coming year,” said Ron Obyrne, sales co-ordinator for Redhead Case Equipment in Saskatoon.
“GATT (General Agreement on Tariffs and Trade) should put a few dollars in peoples’ jeans in the coming years and I think those people will be in the market for the high quality used inventory we have been building up through trade-ins from the ITC.”
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Lawrence Fritz, general manager of Shaunavon Industries (1980) Ltd’s John Deere dealership shared some of those sentiments.
“I’m naturally relieved to see the ITC approved. Otherwise we would have a lot of unhappy customers who bought equipment on that basis.”
Fritz said much of his company’s increased sales were due to the tax credit and he expects early 1994 sales to be slower because farmers were “forward buying” under the program.
Used equipment values are expected to increase as the effects of the tax credit wear off in 1994, dealers say. Heavier sales of new equipment left many used machines on dealers’ lots.
Dealers agreed that large quantities of equipment are being fully depreciated by farmers, in many cases leaving little value in the machines on trade-in.
“We would like to see a tax credit program that applied to the change in the depreciation schedule rather than the new price, as it is now,” said the president of the Canada West Implement Dealers Association (CWIDA), Allan Smith.
“We (CWIDA) will be meeting with the finance minister at the end of January and will suggest a new program of tax credits. There is a market for the good used equipment that has been taken on trade due to ITC. … If the grain prices continue to show improvement and cattle remain strong, I think 1994 may be a good year as well.”
