INDEPTH: BUDGET 2004
Issues: Innovation
CBC News Online | March 23, 2004
Ottawa promises venture capital
Ottawa says it wants to help the country's entrepreneurs turn research into products, so Finance Minister Ralph Goodale announced plans in his budget to make up to $250 million available for venture capital.
"If Canada is to become an incubator of dynamic new companies, we must do a better job getting resources into the hands of Canadian entrepreneurs so they turn great concepts into going concerns," Goodale said.
The federal government said the money will be set aside for investment by the Business Development Bank of Canada.
About $100 million will go for "pre-seed" and "seed" investment for embryonic technologies. BDC will make direct investments and participate in investment funds in areas such as life sciences, biotechnology, plus medical, environmental and information technology.
Another $100 million will go to the creation of specialized venture capital funds, while another $50 million is earmarked for direct investment in early-stage firms.
Some business tax relief
While there were no major announcements on tax cuts for businesses in the budget, Goodale said the income limit on the small business tax deduction will be raised to $300,000 from $250,000 in 2005, one year earlier than originally planned.
Ottawa also plans to increase the capital cost allowance rate for computer equipment to 45 per cent from 30 per cent. The cost allowance on broadband, Internet and data network equipment will be raised to 30 per cent from 20 per cent.
The capital cost allowance determines how much of the cost of a capital asset a business may deduct in a particular year.
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