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 Tax 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