Information Notice, December 2007

• On December 13, 2007, measures relating to Labour Sponsored Investment Funds (LSIF) Corporations were announced in the 2007 Ontario Economic Outlook and Fiscal Review. The proposed amendments must be passed by the Legislature and receive Royal Assent to become law. This notice provides general information and is not a substitute for the legislation.

Previous Changes

On September 30, 2005, following consultations with the LSIF industry, the government established a phase-out of the LSIF tax credit. The timetable of the phase-out allows investors who purchase LSIF shares to receive a provincial tax credit until the end of the 2010 tax year. The government also introduced amendments to investment requirements and special wind-down rules to provide LSIFs greater flexibility in managing their portfolios.

Phase-out Extended by One Year

The government proposes to extend the phase-out of the LSIF tax credit by one year by:

• maintaining the 15 per cent tax credit rate until the end of the 2009 tax year
• lowering the rate to 10 per cent for the 2010 tax year
• lowering the rate to 5 per cent for the 2011 tax year
• eliminating the credit for tax years after 2011.

Increase in Maximum Investment Amount

The government also proposes to increase the maximum investment that qualifies for the provincial tax credit from $5,000 to $7,500. This proposed change would be effective January 1, 2007.

Research Oriented Investment Funds

The additional tax credit for investments in LSIFs that qualify as Research Oriented Investment Funds (ROIFs) would remain at 5% until the end of the 2011 tax year, after which it would be 0%. In addition, the proposed changes would increase the maximum investment in a ROIF that qualifies for the additional 5% provincial tax credit from $5,000 to $7,500. This proposed change would be effective January 1, 2007.

Further details to be issued

More detailed information will be published shortly.

Further information

To obtain the most current version of this publication, or additional information, visit our website at ontario.ca/revenue or contact the Ministry of Revenue at:

• 1 866 ONT-TAXS (1 866 668-8297)
• 1 800 263-7776 teletypewriter (TTY)

© Queen's Printer for Ontario, 2007

ISBN 978-1-4249-5597-8