C. D. Howe Institute Commentary 3 venture financing, relative to the abundance of such funds in the United States, which is critical to funding the market expansion of emerging companies.2 The investment performance of Canadian venture capital firms also significantly lags that of US firms. [...] Further, the inability of Canadian operating companies to obtain sufficient capital to expand successfully in the North American market also contributes to their having to be sold early in their life cycles and long before they attain market leadership, frequently to large US companies and often at low prices.4 The result is that Canada is not deriving the full benefit of the billions of dollars o [...] For example, if a Canadian private equity firm were to invest in a US private company, gain on the sale of shares of the US company would not be subject to any US tax — the Canadian private equity firm and its investors would pay only the taxes imposed by Canada.6 By contrast, a US private equity firm or institutional investor that invested in a Canadian private corporation would be potentially su [...] The purchaser must then remit these funds to the CRA within 30 days of the end of the month in which the closing occurred, or such later date as the CRA expressly allows in writing. [...] But only much later, when the CRA actually completes its review of the application and issues the certificate is the purchaser able to transfer the funds withheld to the nonresident private equity firm.