Thank you, Mr. Chair.
I understand that there were three measures in particular from budget 2013 that the committee had expressed a particular interest in. I'll provide just a brief overview of each of those three measures. Then we'd be happy to answer any questions the committee members might have.
The first measure has to do with labour-sponsored venture capital corporations, or LSVCCs.
This measure would phase out the federal LSVCC tax credit. The federal credit will remain at 15% when it is claimed for a taxation year that ends before 2015. It will be reduced to 10% for the 2015 taxation year, and to 5% for the 2016 taxation year. The federal LSVCC credit will be eliminated for the 2017 and subsequent taxation years.
The measure will also end new federal LSVCC registrations and the prescription of new provincially registered LSVCCs for tax purposes. An LSVCC will not be federally registered if the application for registration is received after March 20, 2013. A provincially registered LSVCC will not be prescribed for the purposes of the federal credit unless the application was submitted before March 21, 2013.
The second area of interest relates to mining expenses.
With regard to mining expenses, pre-production mine development expenses—these are certain intangible expenses, such as sinking a mine shaft or removing overburden—are currently treated as Canadian exploration expenses for tax purposes, and are therefore fully deductible in the year incurred. They are to be treated as Canadian development expenses, which are deductible at a rate of 30% per year on a declining balance basis. The transition from Canadian exploration expenses to Canadian development expenses will be phased in over the period from 2015 to 2017.
In addition, the accelerated capital cost allowance provided for certain assets, such as plant facilities, roads, and airstrips, acquired for use in new mines or eligible mine expansions is phased out over the period from 2017 to 2020, other than for bituminous sands and oil shale, for which the phase-out was announced in budget 2007.
The last measure relates to the additional deduction for credit unions.
The first budget implementation act, Economic Action Plan 2013 Act, No. 1, included amendments to phase out over five years the additional deduction available for credit unions. The additional deduction provides credit unions with access to the small business tax rate that is not available to other corporations.
This measure remedies a technical issue with that phase-out. In particular, it ensures that during the phase-out period, the portion of the credit union's income that is not eligible for the additional deduction is taxed at the rate of 15%, the general corporate rate. This measure applies to taxation years that end after March 20, 2013, and is therefore consistent with the phase-out of the additional deduction.
Those are my comments, Mr. Chair.