Talk by Andrew Skeldon

== Incentives Landscape in Canada

Overview, there are a few buckets:

  • Tax credits, typically no defined budget, if you meet criteria you apply and get it.
  • Defined grants and discretionary, government picks-and-chooses based on many rules.
  • Negotiated, very large investment, company may go directly to government and present business case.

There are roughly 3,000 programs in Canada. They have general themes though:

  • R&D Projects, for product and process from basic research to shop floor
  • Capital Investments
  • Employment, creation, conversion, and training.
  • Location
  • Environment
  • New Markets

Focus and opportunities, of late, Federal Side:

  • Big push on Clean Tech, energy/environment.
  • Innovation and AI
  • Critical minerals
  • Agri-food
  • Indigenous support

Ontario Provincial:

  • Similar
  • Automotive and electric vehicles

Shift away from direct grants toward loans.

Key Considerations

  • Plan ahead, application for non-tax incentives must be made before the investment begins.
  • Budget, stacking possible, typically <75% of the project cost.
  • Partnerships, number of plans want multiple entities

Tips

  • Understand the program
  • Demonstrate the plan
  • Direct and succinct
  • Show capabilities to execute
  • Avoid fluff
  • Justify funding need

SR&ED

Tax credit. What’s new: CRA review has brought up the “5 Questions”, really 2: How did you go about the project? Why did you go with this project? They want to see a systematic approach and some advancement in knowledge.

Clean Economy ITCs

There are 6 credits. Refundable tax rate is different for each program. Some are subject to labor requirements. None of this applies to anything I’m doing, but let’s talk about:

  • Clean Technology Investment Taxi Credit, these ITCs are very much focused on capital assets.
  • Mostly solar panels, heat pumps, etc.
  • Includes industrial zero-emission vehicles, charging stations, and more.

Discretionary Program Examples

Defined criteria, priorities.

  • SREPs Program - Smart Renewables and Electrification Pathways

    • Looking to fund 50% under utility support stream
    • Electricity system decarbonization
    • Critical Region Priorities

  • FedDev - Business Scale Up

    • Provides 0% interest loans up to 50% of capital costs
    • Purchase new equipment

  • FedDev - Regional Homebuilding Innovation

  • FedDev - AI

    • First stream for developers to bring technology to market, zero interest loans up to 2,500,000CAD.
    • Second stream for upgrading equipment to

  • IRAP - AI Assist

    • For SMEs just starting to get into the AI world, up to 75,000CAD.

  • SWODF/EODF - Southwestern Ontario Development Fund, Eastern Ontario Development Fund

    • Golden Horseshoe area excluded

== Startups

  • Tend to be smaller dollar opportunities
  • May not be cash at all
  • May be mentorship, senior consulting.
  • 5-10k, 50k grants.