For Immediate Release
September 30, 2005

TORONTO – 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.

Contact: Ministry of Finance Information Centre 1-800-263-7965 Toll-Free (Canada/U.S.)