Give and take: Canada’s federal budget aims at boosting innovation – at a cost

Updated: April 8, 2022 at 1:16 pm
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    The latest budget promises a major boost to R&D funding, makes it easier to hire foreign workers and extends a low tax threshold – but what’s missing?

    The Canadian Federal Government’s Budget 2022 has been published, and as with any change in the rules, SMEs are scouring the fine print to see how they will be affected, whether there are new charges to avoid and whether there are opportunities to exploit.  

    For those in the Canadian tech and innovation sector, the budget is largely good news; but as with any budget, there will be winners or losers. 

    Looking first at the innovation winners, Benjamin Bergen, President of the Council of Canadian Innovators, told BetaKit that this was

    An innovation budget through and through, with a clear focus on supporting Canadian innovators, bolstering intellectual property generation, driving clean economic growth, and doubling-down on Canada’s fastest-growing sectors in the years to come. It’s good to see Canada dusting off old playbooks to update its economic strategies,” he added.

    What are these measures? Toronto Star highlighted a number of major developments including:

    • Private companies being encouraged to spend on R&D with a CAN$15 billion fund over five years. This fund will be set up over the coming year with the first investments expected in the following 12 months

    • Changes to the mandate of Canada Infrastructure Bank, to allow it to invest in technologies like small modular reactors and carbon capture and storage

    • The threshold for a low 9 percent taxation rate has been increased from for small businesses from CAN$500,000 to CAN$15million in taxable capital

    • The Temporary Foreign Worker (TFW) Program has changed, with employers in certain sectors now able to hire up to 30 percent of their workers through the program. The program has also been opened up to occupations in the accommodation, food services and retail industries in regions with an unemployment rate at or above 6 percent

    The big news is: if your business is innovation or technology based, there could be funds available to boost your spending power on projects, particularly if those projects are in the field of carbon reduction or capture. Taxes should be lower and hiring people should be easier. 

    Unfortunately, there is always bad news and the Canadian Federation of Independent Business (CFIB) has already expressed disappointment that the Budget “doesn’t include measures to help small businesses’ post-pandemic recovery”. 

    The small business sector continues to face financial hardship following enforced shutdowns and quarantines and there is little to help these businesses that are facing both higher costs and servicing an average of CAN$158,000 COVID-related debt per business.

    At Swoop we are committed to helping SMEs find the funding they need to grow. While the last few years have been difficult, there are still opportunities and Swoop believes that a blended approach of grants, debt and equity investment remains the way for businesses to keep the lights on and customers happy. 

    Swoop will always be on the side of SMEs in finding the best deals on the market, promoting innovative products that adapt to the needs of modern businesses and champion the incredible work done by hard-working Canadian entrepreneurs. 

    Sign up to Swoop and learn more about how funding your business can be fast, easy and less expensive.

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