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Flaherty Introduces More Canadian Budget Legislation

by Mike Godfrey,, Washington

23 October 2012

Canadian Finance Minister Jim Flaherty has introduced another tranche of Budget legislation, aimed, he said, at building a strong economy, creating jobs and growth and enhancing the neutrality of the tax system.

Introducing Bill C-45, the Jobs and Growth Act, 2012, Flaherty noted: “With Canada achieving one of the strongest economic performances in the G-7 and over 820,000 net new jobs created since July, 2009, our government is on the right track for the Canadian economy and Canadian families. However, the global economy remains fragile, especially in Europe and the United States. That’s why we remain focused on supporting the economy with our pro-growth Economic Action Plan 2012.”

The legislation implements a number of tax-related initiatives, and includes a one-year extension of the Hiring Credit for Small Business, which Flaherty says benefited nearly 534,000 employers last year. Clean energy will be promoted and the neutrality of the tax system enhanced by expanding tax relief for investment in clean energy generation equipment and phasing out tax preferences for the mining and oil and gas sectors.

The legislation also makes a number of changes to the pensions system. It puts in place the tax framework for Pooled Registered Pension Plans, which are designed to offer a new tax-efficient pensions vehicle that "pools" workers' pensions through administrators. Administration of the existing Canada Pension Plan will be improved, and pension plans for federal public sector employees will in future need to be sustainable, financially responsible, and broadly consistent with the pension products offered by other jurisdictions. Finally, a series of tax loopholes will be closed.

“Ongoing global economic turbulence and competition from emerging economies mean the government must act now to build a stronger economy. Delaying needed economic and fiscal reforms would only serve to lead Canada down the same road as the troubled European and US economies,” Flaherty concluded.

TAGS: tax | investment | pensions | tax avoidance | tax incentives | energy | public sector | employees | oil and gas | legislation | Canada | tax breaks

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