Kitchener, September 9, 2010
Archived - Minister of Finance Highlights Budget Measure to Cut Red Tape and Boost Venture Capital for Canadian Firms
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In a visit to the Kitchener-Waterloo area today, the Honourable Jim Flaherty, Minister of Finance, highlighted a Budget 2010 measure that will strengthen the ability of Canadian businesses, particularly high-tech firms, to attract foreign venture capital.
“The best way to build a more competitive economy is to create an environment that allows the entrepreneurs who employ so many Canadians to succeed and expand—not an environment that stands in the way of their success with high taxes and red tape,” said Minister Flaherty at an event at the Communitech Hub in Kitchener, a new facility dedicated to the growth and commercialization of Ontario’s digital media industry. “That is why, in Budget 2010, we narrowed the definition of taxable Canadian property, eliminating the need for tax reporting under the Income Tax Act for a wide variety of investments in Canadian corporations. As a result, the world has yet another reason to consider Canada an investment destination of choice.”
By eliminating the unnecessary paperwork associated with section 116’s reporting requirements for a large number of transactions that were already exempt from Canadian tax, the Government’s measure makes it easier for Canadian businesses such as high-tech firms to attract foreign capital needed to capitalize on innovations and introduce new services and technologies. This measure also brings Canada’s domestic tax rules more in line with tax treaties and with the tax laws of its major trading partners.
In his remarks, Minister Flaherty also summarized other measures taken by the Government of Canada to help Canada’s high-tech sector. These include more than $8 billion in new funding for science and technology initiatives and infrastructure since 2006, more than $280 million in Budget 2010 to promote partnerships and collaboration between businesses, academia and government, and tax reductions resulting in an overall income tax rate on new business investment that is the lowest in the G-7 and below the average of member countries of the Organisation for Economic Co-operation and Development.
“Putting our best ideas into commercial practice and putting our best minds to work is what drives our economy onward. I am very proud of the role that our Government has played in working to create the economy of tomorrow,” said Minister Flaherty.
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