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VICTORIA – Government introduced changes to the Employee Investment Act today that will make it easier for small business to obtain investment capital, and that support government’s commitment to create a vibrant private-sector economy with high-paying job opportunities.
Minister of Competition, Science and Enterprise Rick Thorpe made the announcement today.
“This is another example of how we’re meeting government’s New Era commitment to reduce red tape and regulation,” said Thorpe. “By eliminating regulations that may have given some companies an unfair advantage, we’re supporting individuals and small businesses as well as opening the door to increased investment in British Columbia, especially in the heartlands.”
Labour-sponsored funds will be able to invest more dollars in eligible small businesses where and when they are needed. Small businesses in turn will retain control of their operations as they grow and prosper.
“We’re also well aware of the needs of employees and small businesses when the employer retires, ” said Thorpe. “The amended tax legislation supports small business continuity by removing the lifetime limit on tax credits to employee investors who wish to purchase their employer’s business over time.”
Koers & Associates Engineering Ltd. of Parksville endorsed the move.“This legislation is a welcome enhancement that will enable us to complete the objectives of our employee share ownership plan as we transfer control of the company to our employees,”said president Tony Koers. “It’s going to be very helpful to us as several employees have already reached their tax credit limit and would otherwise not be able to participate further.”
Thorpe underlined government’s measured approach in introducing competition in the labour-sponsored fund sector. “As we move forward, we will continue to consult with stakeholders on further red tape reduction for the benefit of taxpayers, employees, shareholders and government.”
On Tuesday the government introduced changes to the Small Business Venture Capital Act. The amendments include the introduction of a direct investment model that cuts red tape and cost for small businesses. It revamps the existing program structure to create more pools of seed capital that can now compete on a level playing field with labour-sponsored funds. The 2003-04 budget adds another $5 million in tax credits for the thriving new-media sector that brings the total program investment capacity to $67 million per year and increases the tax credit cap for labour-sponsored funds by $4 million, which will generate up to $27 million a year in new investments.
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