Ottawa,  January 21, 2008
2008-005

Archived - Government of Canada Provides Flexibility for Canadian Businesses Claiming Investment Tax Credits

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The Honourable Jim Flaherty, Minister of Finance, today proposed to extend the carry-forward period for unused investment tax credits earned by Canadian businesses in the 1998 to 2005 taxation years to 20 taxation years from 10 taxation years.

Corporations operating in Ontario will benefit from one tax return, one set of tax rules and one point of contact as a result of moving to a single corporate tax administration starting in the 2009 taxation year. However, the requirement for one set of tax rules coupled with the current 10-taxation-year carry-forward period may result in some companies not being able to claim their unused federal investment tax credits, such as those for scientific research and experimental development, as previously planned. Extending the carry-forward period to 20 taxation years will provide some additional opportunity to claim these credits, thereby addressing the fact that Ontario corporations can currently choose different levels of investment tax credits and deductions for federal and Ontario purposes, but will no longer be able to so after 2008.

"This change will facilitate a smooth transition to the new single corporate tax administration system in Ontario," said Minister Flaherty. "Moreover, to ensure fairness and simplicity, this change will apply to all federal investment tax credits earned in the 1998 to 2005 taxation years, by individuals as well as corporations, in all the provinces and territories."

The Government intends to introduce legislation to provide this tax relief at an early opportunity.

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Chisholm Pothier
Press Secretary
Office of the Minister of Finance
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David Gamble
Media Relations
Department of Finance
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