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A boost for business

Innovation is a key part of enhancing Canada’s future as a land of opportunity and financial sustainability. Can new incentives help kickstart the economy?

There’s a lot of talk about Canada and innovation lately. And no wonder: it’s a top priority for us to ensure a bright future for all Canadians, but it can be difficult to encourage growth and appeal to investors when the tax system still needs to be reviewed.

However, Budget 2019 does prioritize some key financial wins for innovation, including a motion to eliminate taxable income criteria on SR&ED tax credits for Canadian-controlled private corporations. Measures like this are an essential to fostering innovation because they give smaller businesses and new startups the boost they need to excel in our challenging marketplace.

INNOVATION NATION

There are a few good examples of innovation in action across the country right now that stand to benefit from updates to the federal SR&ED tax program. At the recent Collision Conference, Calgary mayor Naheed Nenshi pitched his city as the nation’s next opportunity hub.

No longer focused exclusively on energy, Calgary now boasts an impressive mix of affordable space and highly trained talent that’s particularly suited for fintech companies and startups. “Alberta has always been open for business,” he emphasizes. “And Calgary has always been a great place to start and grow a business. We’re going to continue to do that… we’re open to the best ideas, open to the best people.”

Ontario is also keen to attract talent and inspire change. FedDev Ontario recently announced a commitment of more than $1 billion to ignite startup growth in three dedicated streams: business scaleup and productivity, regional innovation ecosystem, and community economic development and diversification.

While not every startup is operating in the SR&ED space, for those that are, this move does have the potential to help create jobs and facilitate a more favourable environment for new investment. In fact, southern Ontario’s Waterloo-Toronto corridor is among only three startup ecosystems in the world with representation in every high demand tech field today – from fintech and AI to big data.

WHAT THE FUTURE HOLDS

From coast to coast, Canada’s commitment to innovation is increasingly shaping what it means for us to become a global leader in business. This includes reconsidering how we create public goods while also reducing the tax burden on businesses to generate more capital flow. And while initiatives like the Task Force on Canada’s Economic Future are working to bridge the gap between corporate, professional and community interests, it isn’t always easy in a slower growth economy.

If organizations want to successfully take full advantage of the opportunities and challenges that lie ahead – from productivity-enhancing investments to tax measures that can fuel positive, sustainable ventures – then they need a strategic vision and clear guidance.

That’s where CPAs come into the picture. As a trusted business advisor, you can help companies stay in the black and keep innovating.

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Explore how Canada’s SR&ED tax program can help boost innovation for your business with expert commentary in EY’s Guide to Scientific Research and Experimental Development – a great source for reliable, up-to-date content that’s available 24/7. You can also learn directly from the CRA and experienced practitioners at the 2019 SR&ED Symposium this November.