GrowthWorks Capital Ltd.

GrowthWorks Capital Ltd.
GrowthWorks WV Management Ltd.

GrowthWorks WV Management Ltd.
GrowthWorks Atlantic Ltd.

GrowthWorks Atlantic Ltd.

August 29, 2005 15:42 ET

GrowthWorks Opposes Ontario Government's Decision to End Tax Credit Program for LSIFs

TORONTO, ONTARIO--(CCNMatthews - Aug. 29, 2005) - GrowthWorks(i) announced today its disappointment and concern with the Ontario government's decision to end the labour-sponsored investment fund (LSIF) tax credit program in the province of Ontario.

"We believe this decision is wrong for the Ontario economy and the 450,000 Ontario investors in these funds," said David Levi, President and CEO of GrowthWorks. "There is already a shortage of venture capital in Canada and this decision will make the situation even worse for emerging Ontario companies."

"We are surprised with this decision mainly because the industry was not consulted prior to the government making this decision," said Levi. "We have had discussions with the Ontario government about improvements to the rules, but their plan to end the program was never disclosed."

"Although we don't agree with their decision, we welcome the opportunity to work with government over the next three weeks to review the facts of the situation and establish the continued importance of this program in the province of Ontario," said Levi.

Currently LSIFs provide 60% of the venture capital available to Canadian companies. "The government has not shown how they will replace this supply of venture capital in the province and we believe Ontario will see a significant decrease in the amount of available venture capital if the LSIF tax credit program is not restored," stated Levi.

The LSIF tax credit program currently costs the Ontario government approximately $35 million a year. Fiscal impact studies have shown that there is a payback to the provincial and federal governments for their investment of tax credits within one to three years. Further evidence from these studies also show that for every dollar invested by provincial government, a further $20 of capital is invested in the companies funded by LSIFs. Applying this ratio to the Ontario government's annual investment of $35 million, the companies that LSIFs finance receive approximately $700 million in additional investment from other investors.

About GrowthWorks

GrowthWorks (www.growthworks.ca) is a recognized leader in venture capital fund management with proven experience in the raising and managing of capital. GrowthWorks™ managed funds, including the Working Opportunity Fund, GrowthWorks Canadian Fund, GrowthWorks Commercialization Fund, GrowthWorks Atlantic Venture Fund, and Fullarton Capital managed funds, have approximately $800 million in combined assets. GrowthWorks has a team of skilled and knowledgeable investment professionals with a combined 200 years of experience. The Investment team has a proven track record of identifying, analyzing and structuring investments in emerging sectors. GrowthWorks is a registered trademark of GrowthWorks Capital Ltd.

(i) GrowthWorks refers to affiliates of GrowthWorks Ltd. and includes GrowthWorks Capital Ltd., manager of the Working Opportunity Fund (EVCC) Ltd., GrowthWorks WV Management Ltd., manager of GrowthWorks Canadian Fund Ltd., GrowthWorks Opportunity Fund Ltd. and GrowthWorks Commercialization Fund Ltd., GrowthWorks Atlantic Ltd., manager of GrowthWorks Atlantic Venture Fund Ltd., and Fullarton Capital Corporation, manager of Canadian Science and Technology Growth Fund Inc. and Capital Alliance Ventures Inc.

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