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Government Supports Job Creators With Tax Relief

OTTAWA, Ontario, December 27, 2010 — The Honourable Jim Flaherty, Minister of Finance, today highlighted important tax relief coming into effect January 1, 2011 to support job creators in Canada.

“The economy remains our Government’s number one priority,” said Minister Flaherty. “If we want more jobs, higher wages and an improved standard of living, Canada needs to be the most attractive place for job creators to do business and invest.”

The federal general corporate income tax rate will be reduced from 18 per cent to 16.5 per cent effective January 1, 2011. It will then be reduced to 15 per cent effective January 1, 2012. These rate reductions will decrease the cost of capital and increase the rate of return on investment, encouraging firms to invest more in all sectors of the Canadian economy.

“Since 2007, Canadian businesses have been investing with the knowledge that the Government is delivering substantial tax relief,” continued Minister Flaherty. “As a result of federal and provincial tax changes, Canada now has an overall tax rate on new business investment that is substantially lower than that in any other Group of Seven (G-7) country. That’s good news for jobs and economic growth.”

To strengthen Canada’s business tax advantage, the Government of Canada has undertaken many initiatives, including through Canada’s Economic Action Plan, to improve business competitiveness and make Canada a more attractive place to invest. In addition to reducing the federal general corporate income tax rate, the Government eliminated the federal capital tax in 2006 and the corporate surtax in 2008. In Budget 2010, the ability of Canadian businesses to attract foreign venture capital was improved by narrowing the definition of taxable Canadian property, thereby eliminating the need for tax reporting under section 116 of the Income Tax Act for many investments.

News source: Department of Finance

 

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