Ministry of Finance

Ontario Business Will Benefit From New Tax Collection Agreement

TORONTO, Oct. 6 — Businesses throughout Ontario will benefit from
one tax return, one set of rules and one point of contact as a result of a
corporate income tax collection agreement signed today by Canada's New
Government and the Government of Ontario.
    "By moving to a single corporate tax collector, we are slashing red tape
and reducing up to $100 million in annual compliance costs for Ontario
businesses," said the Honourable Jim Flaherty, Minister of Finance. "This
agreement means businesses can spend more time focusing on expanding their
facilities and markets in this highly competitive global marketplace."
    Minister Flaherty and the Honourable Greg Sorbara, Minister of Finance of
Ontario, today signed a Memorandum of Agreement, under which the federal
government would collect and administer Ontario's corporate income tax. Under
the agreement, businesses would make combined payments starting in 2008 and
file a single return beginning in 2009 for taxation years ending after
December 31, 2008.
    "Businesses have been asking us to reduce administrative overlap and
duplication," Minister Sorbara said. "When governments work together, we can
improve efficiency and help businesses free up resources that they can then
invest in creating jobs. That, in turn, creates a stronger, more productive
economy, which benefits all Ontarians."
    This agreement will reduce compliance costs for businesses and enable the
Canada Revenue Agency (CRA) to streamline service and reduce administrative
costs. Benefits to Ontario businesses will include:

    
 — A single tax form.

 — A single tax collector. The CRA will collect both federal and Ontario
       corporate income tax and administer the province's capital tax.

 — One set of income tax rules.
    
Contact Info

    The federal government already collects corporate income tax for seven
provinces and three territories. Provisions in the agreement signed today,
such as Canada's enhanced enforcement efforts in the areas of provincial
income allocation and interprovincial tax avoidance, will benefit these
provinces and territories.
    "Consolidating corporate tax collection and auditing services is welcome
news for the business community, and a move long called for by the Ontario
Chamber of Commerce," said Len Crispino, President and CEO of the Ontario
Chamber of Commerce. "Today's announcement will result in increased savings
and efficiencies for both business and government, improving the competitive
position of our province."
    Copies of the Memorandum of Agreement are available on the Department of
Finance website at www.fin.gc.ca/toce/2006/TxMOA_e.html.

    
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       FEDERAL                            ONTARIO
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    Department of Finance              Ontario Ministry of Finance
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    Jacqueline Couture
    Media Relations
    Canada Revenue Agency
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