OTTAWA - Canada's Chemical Producers found some positive news in today's Federal Budget, but are disappointed with the provision to extend the Capital Cost Allowance for machinery and equipment for three years, instead of five.

"Three years will help small and medium size projects, but will not help win large scale investments in our industry" said Richard Paton, President and CEO of the Canadian Chemical Producers' Association. Paton added: "A large scale project, which typically would bring over $1 billion in new investment into Canada, takes four to five years to build, and the capital cost allowance can't be used until the equipment is purchased an installed - typically in years four and five".

This past year, Canada's chemical producers saw a dramatic 50% decline in sales to Canadian customers, signaling fundamental changes to North American manufacturing with production shifting to offshore locations, primarily Asia.

Said Paton: "The manufacturing sector in Canada is in a great deal of distress. We are concerned that the response from government has not been commensurate to the problem."