Ministry of Finance

LSIF Tax Credit To Be Phased Out By End Of 2010 Taxation Year

Province, Industry Share A Commitment To An Orderly Transition

    TORONTO, Sept. 30 — The Labour Sponsored Investment Fund (LSIF) Tax
Credit would be eliminated by the end of the 2010 taxation year, Finance
Minister Greg Sorbara says.
    "We've consulted the industry, and heard its views," Sorbara said. "We're
committed to an orderly wind-down of this tax credit, and believe that this
schedule will help accomplish that goal."
    The province announced August 29 that it would end its involvement in the
LSIF tax credit program and harmonize certain requirements to help funds move
to the federal government's Labour Sponsored Venture Capital Corporation
program. The province proposes to phase out the tax credit as follows:

    


    -------------------------------------------------------------------------
    Taxation Year              RSP Sales Season              LSIF Tax Credit
    -------------------------------------------------------------------------
        2005                         2006                          15%
    -------------------------------------------------------------------------
        2006                         2007                          15%
    -------------------------------------------------------------------------
        2007                         2008                          15%
    -------------------------------------------------------------------------
        2008                         2009                          15%
    -------------------------------------------------------------------------
        2009                         2010                          10%
    -------------------------------------------------------------------------
        2010                         2011                           5%
    -------------------------------------------------------------------------

    The five-per-cent incremental tax credit offered for Research Oriented
Investment Funds would be phased out on the same timetable.
    The Ministry will consult further with the industry on transition rules
governing pacing, eligibility and other reporting requirements.
    Venture capital is typically invested early in the creation of a new
company, and held for a longer period of time than most other types of
investments. Last month's announcement recognized that orderly transition was
needed and input from the industry would be important.

    Disponible en français

                For more information visit www.fin.gov.on.ca

    

Contact Info