Prior to the release of Federal Budget 2018, there were fears that Finance Minister Bill Morneau would announce measures to limit loss carryovers or SR&ED tax credits. This did not turn out to be the case. But, as with most things, there were good news and bad news takeaways for businesses. Some of these are summarized below.
Good News for Businesses
- Industrial Research Assistance Program (IRAP) will receive increased funding. This will address chronic under-funding over the last few years. IRAP supports early and middle stage R&D.
- Canada Summer Jobs will receive more funding to help encourage Canadian business to hire summer students.
- Skills training for Canada Job Grant programs will be extended and renewed.
- Renewed and extended funding for regional development agencies such as FedDev Ontario, IBI, and IBGP programs was announced.
- The government has committed to consolidating many programs, including export development programs, like CanExport and FedDev Ontario programs, to enable business owners to find the right funding program and apply for the funding they need.
Bad News for Businesses
- The proposed programs consolidation will likely take at least 6-9 months. Business owners can expect longer-than-normal delays in both the application review process and rejections until new program rules have been implemented.
- The proposed consolidation and reform of Federal Development Agencies will also likely delay new and ongoing funding Yves Landry Foundation’s program for skills training and CME SMART Program for advanced equipment acquisition, which were previously funded by FedDev Ontario.
- Strategic Innovation Fund for R&D and business expansion will now only accept applications for projects of at least $10 million in eligible cost. It has yet to be announced what will happen with the applications already in the submission process and whether those worth less than $10 million will be grandfathered in.
- No announcement made regarding funding for productivity improvement and equipment purchases for businesses.
- No word on funding for companies who handle their skills training internally. The government has instead announced the allocation of a few million dollars to study and develop innovative training methods. We have yet to know exactly what this means.
For a review of SR&ED benefit rates and what you could be eligible for, please refer to our article “SRED for CCPCs versus Non-CCPCs in Ontario” or contact SRED Unlimited at 1.647.588.7777.