Ottawa, September 19, 2005
2005-059

Archived - Government Postpones Advance Rulings on Income Trusts and Other Flow-Through Entities: Emphasizes Importance of Consultations

Minister of Finance Ralph Goodale today announced that he has asked Minister of National Revenue John McCallum to postpone providing advance rulings respecting flow-through entity (FTE) structures effective immediately. Minister McCallum supports this request.

On September 8, 2005, the Government issued a paper and launched consultations on the economic and fiscal implications of FTEs. Submissions will be received until December 31, 2005.

"We launched consultations because of our concern about how the increased use of this type of business vehicle may affect economic growth," said Minister Goodale. "We have a viable and productive corporate sector that invests, creates jobs and contributes its fair share of tax. I want to make sure that government tax revenues are appropriately safeguarded, but even more importantly I want strong and vibrant Canadian enterprises of all sizes in all sectors contributing to a dynamic and growing economy."

The Minister said that, while these consultations are underway and until the Government announces what action it may take, it would be inappropriate for the Government to issue advance tax rulings on these matters.

Minister Goodale encouraged the public to participate fully in the consultation process. He added that the Department of Finance is closely monitoring developments in the FTE market with a view to proposing measures in response to the consultations. The Government will consider what, if any, transitional measures would be appropriate.

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