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Blake, Cassels & Graydon (US) LLP: Investment and Other Opportunities in Canada's 2005 Budget

 
On February 23, 2005, Canada's federal government outlined its fiscal policy agenda for the next five years in Budget 2005. If passed, the budget will provide tax relief for businesses and individuals, and significantly increase federal spending on national security, health care, municipalities and the environment. Early reports suggest that the budget will have sufficient political support to be adopted by Parliament.

Highlights include:

• Good news for individuals, tax-exempt pension funds and their investment advisers with the elimination of restrictions on foreign property holdings by pension funds and Registered Retirement Savings Plans (RRSPs), and increases to annual contribution limits for pension
  plans and RRSPs
• Good news for businesses with a phased elimination of the corporate income surtax by 2008 and a phased 2% drop in the general corporate income tax to 19% by 2010
• More aggressive tax depreciation rates for equipment in the oil and gas, telecommunications and electricity sectors, as well as for efficient and renewable energy generation equipment
• Release of a consultation document seeking views by June 1, 2005 on a wide range of potential changes to financial institutions legislation, including regulations governing foreign bank entry into Canada
• Updates on plans for changes to Canada's securities regulation landscape, cross-border share-for-share exchanges and foreign ownership of income trusts
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