Federal budget takes positive steps but falls short of expectations



    TORONTO, March 19 /CNW/ - The Investment Industry Association of Canada
commends the federal government for introducing measures to improve the
competitiveness of corporate tax rates, including higher depreciation rates
and a fiscal incentive to eliminate provincial capital taxes. However, the
Association does not believe the measures go far enough. "To compete in the
global market, we need a federal and provincial tax regime that promotes risk
investment and capital formation, especially for small businesses," said Ian
Russell, President and CEO, Investment Industry Association of Canada.
    The Association and its members had expected more. "The Investment
Industry Association had hoped for capital gains tax relief or other
incentives to stimulate capital-raising in public markets. Extending the
flow-through tax credit concept to knowledge-based industries or allowing
small Canadian private corporations to continue benefiting from the scientific
research and experimental development tax credit after going public would have
helped achieve this. Such tax changes foster innovation, attract increasingly
mobile capital to finance new business opportunities and unlock capital
trapped in sub-performing assets," said Russell.
    The Association gave the government good marks for recognizing the
importance of competitive Canadian capital markets, encouraging
principles-based regulation, and providing more federal resources for
enforcement.
    "Eliminating unnecessary regulation lowers the cost of capital for
issuers, raises returns for investors and ensures successful Canadian
companies with highly-skilled employees. The Association will work closely
with the federal and provincial governments to achieve this outcome," said
Russell.
    The Association supports the government's steps to foster growth in
retirement and education savings and the introduction of the disability
savings plan. The Association also urges government to maintain fiscal
discipline so that it can extend further tax relief to Canadian taxpayers and
businesses.

    The Investment Industry Association of Canada (IIAC), formerly the
industry association arm of the Investment Dealers Association of Canada
(IDA), advances the position of the Canadian investment industry on regulatory
and public policy issues. As the professional association for the industry,
the Investment Industry Association has a mandate to promote efficient, fair
and competitive capital markets for Canada while helping its member firms
across the country succeed in the industry.





For further information:

For further information: Annie Côté-Kennedy, Director, Public Affairs,
Investment Industry Association of Canada, Tel: (416) 687-5474, E-mail:
acotekennedy@iiac.ca

Organization Profile

Investment Industry Association of Canada (IIAC)

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FEDERAL BUDGET REACTION 2007

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