The 2021 Federal Budget has a little something for everyone. There is no question that the Canadian Government is using the recovery from the pandemic to chart a new course for developing our economy. It had a clear focus on improving the well-being of lower-income Canadians, strongly supporting carbon reduction, and attempting to reshape the economy around innovation. All Canadians will have an opinion on the budget, the associated deficit and how it impacts our country.
But what does the budget mean to Innovators?
Here at Easly, the SR&ED program has been our traditional stomping ground, and this budget doesn’t say anything about the program directly. However, the stimulus money being directed into a particular set of sectors benefits many SR&ED eligible firms. That money is largely going to be invested via grant programs.
Here’s a quick breakdown of some of the programs:
Universal Broadband Fund (UBF) – An additional $1B will be directed to UBF projects to extend broadband internet access to all Canadians. This is an important source of capital development funding for regional telcos.
Sector Stimulus – The budget seeks to enhance Canada’s position in three specific industries. Artificial Intelligence ($445M), Quantum Research ($360M), and Photonics Fabrication ($90M) are all named in the budget and can expect funds directed through Innovation, Science and Economic Development Canada and other programs. Superclusters will receive $60M over two years that target some of the same R&D.
Strategic Innovation Fund (SIF) – An additional $7.2B will be directed to SIF, targeting Carbon Reduction, Life Sciences, Bio-Manufacturing and Aerospace. Applicants should take note that funding will be directed to support four policy objectives:
- Net Zero 2050 (including a new goal of reducing GHG emissions 36% from 2005 levels by 2030)
- Support Sector Recovery & Sustainable Growth (e.g. build back the economy)
- Build Domestic Resilience & Pandemic Preparedness (e.g. equip us to handle the next one with technology & manufacturing capacity)
- Promote Growth & Jobs
Nearly all of the above will be SR&ED eligible for firms that meet the requirements. Founders, start-ups, scale-ups and mature businesses alike would do well to understand the grant and investment tax credit (ITC) landscape. Projects that align with the budget’s goals and existing tax programs will be positioned to receive a lot of government funding.
There will undoubtedly be challenges in deploying all of these programs and getting funding to eligible Canadian businesses – This is where Easly can help. Innovators can optimize their cash flow by advancing these grants and ITCs using our Capital-as-a-Service financing platform. It’s a quick and easy way for businesses to secure capital throughout the year to continue investing in their growth.
Speak with one of our team members to find out why a growing number of innovative Canadian businesses rely upon Easly as a continual source of non-dilutive capital.