Today as part of an Economic and Fiscal Update the Minister of Finance proposed that the period for which non-capital losses and investment tax credits can be carried back and forward be extended. Non-capital losses can currently be carried back up to 3 years and can also be carried forward. The 2004 budget extended the period over which non-capital losses can be carried forward from 7 to 10 years. It has now been proposed to extend the non-capital loss carry-forward period of all taxpayers to 20 years.
This measure will apply to general non-capital losses, farm losses, restricted farm losses, losses applied under Part IV of the Income Tax Act, and taxable Canadian life investment losses under Part XII.3 of the Act. It will also apply to ITCs earned for SR&ED, Atlantic investment, and mineral exploration. The measure is proposed to apply to losses incurred and credits earned in taxation years that end after 2005.