April 15, 2012
The new federal budget features a series of measures aimed at improving business innovation and encouraging private sector job creation.
The government’s Economic Action Plan 2012 focuses on creating more high-value jobs by supporting businesses, including high-growth and knowledge-based firms that will benefit from enhanced access to venture capital. As part of the plan, the government is making $100 million available to BDC to increase its venture capital activities.
Here are some other key measures announced in the budget that are of interest to entrepreneurs.
- Employment Insurance premiums made more stable and predictable, with annual increases limited to five cents until the fund is balanced.
- Hiring Credit for Small Business extended for one year to help small businesses to defray the costs of hiring new workers.
- Export Development Canada granted extension of one year to provide domestic business financing.
- Pennies will no longer be distributed as of fall 2012.
- $30 million invested over three years in the Opportunities Fund to allow more Canadians with disabilities to obtain work experience with small and medium-sized businesses.
Here are key budget measures aimed specifically at supporting innovation in the private sector.
- Streamline and improve the Scientific Research and Experimental Development (SR&ED) tax incentive program, including shifting from indirect tax incentives to more direct support for innovative private sector businesses. The general 20 percent tax credit rate will be reduced to 15 percent and capital expenditures will be excluded from this tax credit.
- $400 million to help increase private sector investments in early-stage risk capital and to support the creation of large-scale venture capital funds led by the private sector.
- $110 million per year to the National Research Council to double support to companies through the Industrial Research Assistance Program (IRAP).
- $14 million over two years to double the Industrial Research and Development Internship (IRDI) program.
- $12 million per year to make the Business-Led Networks of Centres of Excellence program permanent.
- $105 million over two years to support forestry innovation and market development.
- $95 million over three years, starting in 2013–14, and $40 million per year thereafter, to make the Canadian Innovation Commercialization Program permanent and to add a military procurement component.
- $67 million in 2012–13 as the National Research Council (NRC) refocuses on business-led, industry-relevant research.
- $37 million annually starting in 2012–13 to the granting councils to enhance their support for industry-academic research partnerships.
- Launch of the Western Innovation Program to provide financial support to innovative small and medium-sized enterprises in Western Canada.
In response to Canada’s need for skilled workers and develop the untapped potential in the labour market, the government announced plans to improve the economic immigration system. Measures include:
- Provide further incentives to retain educated and experienced workers through the Canadian Experience Class;
- Introduce a new immigration stream to facilitate the entry of skilled trades people;
- Target, through the Business Immigration Program, more active investment in Canadian growth companies and more innovative entrepreneurs;
- And improve the Provincial Nominee Program by focusing on economic immigration streams in order to respond quickly to regional labour market demand.
To meet regional employer demand and improve the responsiveness of the Temporary Foreign Worker Program, the federal government has also reduced the paper burden on employers and shortened processing times.
For more information, please consult the budget documents.