The Investment industry Association of Canada (IIAC)’s pre-budget submission is now available online.
In its submission, the IIAC commended the federal government for its efforts to balance the books, improve the business tax landscape and make it more attractive for Canadians to save in TFSAs and RRIFs.
At the same time, the IIAC noted that weak global economic conditions and depressed energy prices have placed a stranglehold on economic growth. The pullback in investment in the energy sector will reverberate across Canada. Also of concern is the fact that non-energy exports remain depressed, even after the Canadian dollar’s depreciation.
Sub-par economic growth need not be Canada’s fate. In its pre-budget submission, the IIAC proposed targeted incentives that will boost economic growth by supporting new enterprise and entrepreneurship and the expansion of small and medium-sized businesses.
Specifically, the IIAC called on the government to introduce legislation to provide for the deferral of income tax on capital gains if the proceeds from the disposition are reinvested in eligible small business. This would unlock capital tied-up in low-return investments and would encourage investors to take advantage of opportunities offered by small-cap publicly listed companies with faster growth potential.
The IIAC also recommended that the government introduce the equivalent of the highly successful UK Enterprise and Seed Investment Schemes which provide income tax relief to individuals who purchase shares in eligible small companies and start-ups, subject to certain conditions.
Finally, the IIAC encouraged the government to make targeted improvements to existing tax-assisted savings vehicles to help Canadian maximize their retirement savings opportunities.
To access the IIAC’s submission, please click here.