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Canada’s economic health can no longer rely on resource exports or large-scale energy project development, argues the Investment Industry Association of Canada (IIAC) in a pre-budget submission to the House of Commons Standing Committee on Finance.

Read: IIAC announces Hall of Fame inductees

Instead, higher investment in small- and mid-sized businesses has the potential to spur entrepreneurship and business expansion, kick-starting the economy. IIAC recommends that the federal government:

  • implement legislation to provide for the deferral of income tax on taxable capital gains incurred in a taxation year when the proceeds are reinvested in small business shares within a six-month period;
  • implement a tax relief scheme to spur investment in small Canadian companies and start-ups modeled after the successful UK Enterprise Investment Scheme (EIS) and Seed Enterprise Investment Scheme (SEIS); and
  • create targeted efforts to improve existing federal tax-assisted savings vehicles, including:
    • relief of employers’ and employees’ contributions to group RRSPs from payroll tax;
    • an increase to annual RRSP contribution limits and compensatory adjustments for individuals that have missed annual contributions due to temporary interruption of their working careers; and
    • elimination of mandatory minimum yearly drawdowns from RRIFs and similar accounts.

Also read:

Half of Canadians foggy on what can go in a TFSA

New RRIF rules don’t go far enough: C.D. Howe

Originally published on Advisor.ca

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