Just like that, the Ontario government has decided to eliminate the 15% tax credit given to investors who participate in labour-sponsored funds. The decision, which takes effect before the end of the year, was made because the government believes the venture capital market is healthy and there is no longer any need for tax incentives. This will be a huge blow to VCs such as VenGrowth and GrowthWorks that have used tax credits as a key selling point. At the same time, traditional VCs such as Ventures West, Jefferson Partners and J.L. Albright will toast the fact the playing field just a lot more level. If the Ontario government is looking for new ways to encourage investment in technology, particularly start-ups, it should look into providing investors with larger capital gains limits. This might direct more money into the hands of fledgling entrepreneurs, who are desperately looking for growth capital.