Small Business Advisory Council to be established

A Small Business Advisory Council will be established this year as part of government�s overall economic development agenda, Industry, Trade and Rural Development Minister Beaton Tulk announced today.

Minister Tulk also announced that funding of $2.6 million is being continued in the 2002-2003 Budget for the Strategic Enterprise Development Fund to help stimulate new small business start-ups and expansions in all areas of the province.

The Small Business Advisory Council will provide ongoing support and advice to the minister on appropriate measures to help continue to grow the small business sector.

"The small business community is a vital and dynamic part of our economy whose potential has yet to be fully tapped, particularly in rural areas," said Minister Tulk, noting that small businesses create more jobs each year in Canada than any other component of the economy. In Newfoundland and Labrador, 95 per cent of all business enterprises employ fewer than 50 people (the upper limit most often used in defining small business), and close to 80 per cent of all businesses in the province employ fewer than five people.

Government�s economic development agenda, as outlined in its Renewal Strategy for Jobs and Growth, recognizes the critical role small business plays in creating employment and contributing to economic growth. Jobs and Growth priorities that have already been acted on to grow the small business sector include the establishment of a new Small Business Seed Capital Equity Program, a new Business and Market Development Program, and a new Venture Capital Tax Credit Program. As well, the tax free threshold for the payroll tax has been increased significantly in recent years, removing 95 per cent of all businesses from the payroll tax, and putting an estimated $8.6 million back in the hands of the business community each year.

More recently, the EDGE program has been enhanced to give it a double-edge advantage in attracting new business investment to the province. New EDGE designated companies, in addition to receiving a 100 per cent provincial corporate income tax rebate, can also receive a new 50 per cent tax rebate on federal corporate income tax. The enhanced EDGE program also increases the tax holiday period for new EDGE designated companies that establish or expand outside the Northeast Avalon to 15 years from10 years, reflecting government�s commitment to develop a highly attractive investment environment in rural Newfoundland and Labrador.

A summary of major government initiatives to create a competitive environment for business is provided in the a backgrounder which follows.

Media contact: Josephine Cheeseman, Communications, (709) 729-4570.

2002 03 21                              3:20 p.m.