Last week, Canadian Minister for Finance, Bill Morneau, tabled the federal budget for the 2019-2020 fiscal year.
As the last of the Federal Government’s current mandate, the budget supports Canadian businesses by encouraging them to make investments that will position them for long-term growth and create jobs across our province. Below, we’ve listed budget initiatives that relate to small businesses:
The Scientific Research and Experimental Development (SR&ED) Program provides more than $3 billion in tax incentives to over 20,000 claimants annually, making it the single largest federal program that supports business research and development (R&D) in Canada. The program provides a 35-per-cent refundable tax credit to eligible small and medium-sized businesses. To date, access to the 35-per-cent rate was determined by a business’ level of income and capital. To better support growing innovative businesses as they are scaling up, the Government proposes to eliminate the income threshold for accessing the enhanced credit. The government is providing $395 million over five years, and $105 million per year ongoing, to support growing and innovative small and medium-sized businesses as they scale up.
Budget 2019 provides up to $100 million to create an Indigenous Growth Fund. Managed by the National Aboriginal Capital Corporations Association (NACCA), this Fund would allow all Aboriginal Financial Institutions, including Métis Capital Corporations and others, to support more Indigenous entrepreneurs, and more ambitious projects. Funding for the Indigenous Growth Fund will be provided through the Business Development Bank of Canada and the Social Finance Fund.
The Budget also provides $50 million over five years to enhance the funding of the Métis Capital Corporations to support the start-up and expansion of Métis small and medium-sized enterprises.
Further, Budget 2019 proposes to invest $78.9 million over five years, with $15.8 million per year ongoing, to support Indigenous entrepreneurs and economic development. This investment, through the Community Opportunity Readiness Program, will help First Nations and Inuit communities build business plans, and provide funding to expand existing Indigenous-led businesses, and launch new Indigenous-led start-ups.
To further support Indigenous entrepreneurs, Budget 2019 also proposes to provide $17 million over three years, starting in 2020–21, to expand the Aboriginal Entrepreneurship Program. This program provides a range of services and supports that promote the growth of a strong Indigenous business sector in Canada.
Budget 2019 provides Futurpreneur Canada with $38 million over five years, starting in 2019–20, to continue its important work of supporting the next generation of entrepreneurs. Futurpreneur Canada will match these investments with funding received from other government and private sector partners. This renewed investment would help support the work of approximately 1,000 young entrepreneurs per year. This funding includes $3 million over five years for Futurpreneur Canada to provide targeted support to Indigenous entrepreneurs.
Budget 2019 proposes the necessary funding and legislative revisions so that regulatory departments and agencies can move forward on the Regulatory Roadmaps in the Agri-food and aquaculture, Health and Bio-sciences, and transportation and infrastructure sectors. The goal is to specifically address stakeholder issues and irritants in these sectors, informed by over 140 responses from businesses and Canadians across the country, as well as recommendations from the Economic Strategy Tables. The Budget also provides funding to continue the government’s work on regulatory cooperation both within Canada and with our trading partners. In addition, Budget 2019 picks up on the Fall Economic Statement, which proposed an annual modernization bill, and the upcoming establishment of an External Advisory Committee on Regulatory Competitiveness.
To help Canadian businesses attract the talent they need to compete and succeed in the global marketplace, the Government introduced the Global Talent Stream in 2016. This was introduced to help innovative Canadian firms quickly access the highly skilled global talent they need to scale-up, grow and help create jobs for Canadians. This will now be a permanent program, allowing employers to recruit and employ high skilled workers in to the future.
To ensure that businesses can access a skilled workforce, and working Canadians get the skills they need to succeed in a changing world, the government is providing:
(1) a training credit that accumulates at a rate of $250 per year to help with the cost of training fees; and
(2) an EI Training Support Benefit to provide income support when an individual takes time off work to train, for up to 4 weeks off work. This helps individuals train, while receiving a source of income that is not from their employer. Importantly, Budget 2019 proposes to introduce an EI Small Business Premium Rebate. Starting in 2020 any business that pays employer EI premiums equal to or less than $20,000 per year would be eligible for a rebate to offset the upward pressure on EI premiums resulting from the introduction of the new EI Training Support Benefit.
Investing in Western Canada
To support the creation of a more resilient, inclusive and diversified economy in the west, Budget 2019 proposes to provide $100 million over three years to Western Economic Diversification Canada to increase support for businesses in western Canada.