The following News Release or Speech has just been posted on the Finance Canada Site.
Ottawa, July 2, 2008
The Honourable Jim Flaherty, Minister of Finance, today released new guidelines for stock exchanges that seek to become Designated Stock Exchanges for income tax purposes. The guidelines will provide greater transparency and increased opportunities for investors, and will improve the ability of Canadian capital markets to respond to global market developments.
“With today’s release of principles that will guide our government’s official designation of domestic and foreign stock exchanges, Canadians can make informed investment decisions confident that securities trade on well-governed, regulated and transparent markets,” said Minister Flaherty. “At the same time, foreign exchanges can now rely on clear rules in their efforts to attract Canadian investments.”
In Budget 2007, the Government updated and streamlined the identification of stock exchanges for purposes of the Income Tax Act. The new three-tiered system includes Designated Stock Exchanges, Recognized Stock Exchanges and Stock Exchanges. Designation status is particularly important for Registered Retirement Savings Plan (RRSP) investors, as securities listed on designated exchanges are eligible RRSP investments. They are also eligible investments for Deferred Profit Sharing Plans, and will be eligible for the recently announced Tax-Free Savings Account.
The attached backgrounder follows through on the Budget 2007 commitment to formalize the process exchanges will be required to follow in applying for designation status and the principles-based criteria the Government will use in evaluating requests.
Also released today is a complete list of current Designated Stock Exchanges, which include all former prescribed exchanges under the previous Income Tax Act provisions. Under the income tax rules, any future additions to the list will be approved by the Minister of Finance. Approvals will follow the process and criteria set out today.
For further information, media may contact:
Office of the Minister of Finance
Department of Finance
FOR MORE INFORMATION: Backgrounder
SOURCE: Dept of Finance Newsroom