2016-2017 Federal Budget Shows Support For Business Growth and Innovation

2016-2017 budget highlights pertaining to Canadian business

Science and Research

• New Post-Secondary Institutions Strategic Investment Fund: $2 billion over three years, starting in 2016, for a new Post-Secondary Institutions Strategic Fund to support up to 50% of the eligible costs of infrastructure projects at post-secondary institutions and affiliated research and commercialization organizations, in collaboration with provinces and territories.
• An additional $95 million per year, starting in 2016, to granting councils for investigator-led discovery research (Canadian Institutes of Health Research, Natural Sciences and Engineering Research Council, Social Sciences and Humanities Research Council and Research Support Fund).
• To support modern agricultural science in Canada, the government will invest $ 30 million over six years from 2016 to 2017 in the agricultural genomics research During the year, the Minister of Agriculture and Agri-Food will develop a strategy to make further investments in science and agricultural research

Business growth and innovation

• $ 800 million over 4 years to support the networks and innovation clusters. The detail program innovation will be unveiled during the year.
• New initiative in 2016-2017 in the form of funding, advice services and export assistance to help businesses be more competitive on the world stage.
• An additional $50 million in 2016 to the National Research Council for the Industrial Research Assistance Program (IRAP)
• Extended investment through enhanced funding for incubators and accelerators, internships, apprenticeships and immigration policy. By 2017-18, the government has promised to provide funding of $150 million dollars. Renewal of the tax credit for mineral exploration until 31 March 2017

Tariff relief measures for manufacturers

• The government eliminates tariffs on dozens of manufacturing inputs for Canadian manufacturers to enhance their competitiveness at home and abroad
• Establishment of consultation on the elimination of customs duties on ingredients used in the manufacturing of food products that are not subject to supply management. Primarily used in the food industry, the elimination of tariffs will promote investment and job creation

Clean growth economy

• Over $130 million over five years, starting in 2016–17, to support clean technology research, development and demonstration activities $62.5 million over two years, starting in 2016–17 to support the deployment of infrastructure for alternative transportation fuels, including charging infrastructure for electric vehicles and natural gas and hydrogen refuelling stations.
• The Government will advance these objectives by working with provinces and territories, municipalities and the private sector. These resources will also support technology demonstration projects that advance electric vehicle charging technology 6 regional Canadian development agencies supporting clean technology initiatives will see their budget doubled, reaching $ 100M from 2016 to 2017
• The budget proposes, from 2016-2017, $ 128,8M over 5 years for the implementation of policies and programs focused on energy efficiency

What does this mean for Canadian tax credits?

No changes were announced to the Scientific Research & Experimental Development (SR&ED) tax program, the largest R&D program aimed at the private sector. It is delivered through the tax system and thus there is no predetermined budget for the SR&ED program. All companies based in Canada that invest in R&D can qualify, irrespective of their size, industry sector or technology area they represent – as long as they perform qualified R&D. The SR&ED program will remain steady and provide up to 74% in Investment Tax Credits (ITC) to Canadian corporations.