Column
Budget 2019: What’s in it
for the Graphics Industry
Election year budgets are always a chance
for the government in power to shower both
taxpayers and businesses with presents.
Nevertheless, I confess, based on past
budgets, this columnist was pleasantly
surprised by the renewed commitment of
the Liberal government to encourage
innovation in the small to medium sized
(SME) business community. Let’s see what’s
in the budget for your business.
Innovation Funding
There are two primary innovation funding
programs for business in Canada, IRAP
(Industrial Research Assistance Program)
and SR&ED (Scientific Research and
Experimental Development). Together,
they make up the majority of all grants,
innovation tax credits and cash provided
by the federal government for all incen-
tivized programs. Both programs have
wide support amongst both the Liberal
and the Progressive Conservative parties.
IRAP was introduced in the 1950’s and
has continued to be funded by all federal
governments. SR&ED was introduced
in the 1990’s and it too has had the
commitment of both federal parties
who have been in power since that
introduction.
Budget 2019 increased the funding
available for SMEs within the SR&ED
program. Previously, if an SME earned
more than $800,000, they were not
eligible for the premium 35% refund rate
for their innovation projects, but only
15%. In other words, if your business
spent $100,000 on innovation, regardless
of earned income, Budget 2019 has just
granted you an additional $20,000 to
support that innovation. Interestingly,
Budget 2019 did not eliminate the capital
threshold, which states that companies
with capital valued at greater than $50
million are not eligible for the premium
rate. In other words, this SR&ED addi-
tional funding is specifically for SMEs,
not large corporations.
24 | May 2019 | GRAPHIC ARTS MAGAZINE
Stock Options
for Start-Ups
Budget 2019 lim-
its the availability
of stock option
deductions for most companies, exclud-
ing “startups and rapidly growing
Canadian business”. There are not many
details in the budget about this meas-
ure, but clearly, the federal government
is encouraging start-ups and SMEs to
invest in their human resources. As with
most budgets, Budget 2019 states that
stock options issued before the budget
announcement would not be subject to
the new regime.
Accelerated Capital Cost Allowance
Budget 2019 confirms the intention of the
government to proceed with the capital
cost allowance (CCA) acceleration
measures originally announced in their
Fall Economic Statement. These are:
· Full expensing for the cost of manu-
facturing and processing (M&P)
machiner y and equipment on a
temporary basis
· Full expensing for the cost of specified
clean energy equipment on a temporary
basis
· A temporary accelerated investment
incentive
This measure allows your business to
immediately write-off the cost of M&P
equipment, and specifically, clean
energy equipment. It also includes an
accelerated investment incentive of up
to three times the normal first-year CCA
deduction for other capital assets subject
to CCA regime, with few exceptions. It’s
time to go back and re-calculate your
return on investment for that new
machinery you’ve been contemplating.
It might just be cost justifiable under
these new measures.
Canada Training Credit
Every budget always has something for
workers. Budget 2019 is no exception.
Every tax year beginning in 2019, workers
with income that does not exceed the
third tax bracket (currently $147,667) can
accumulate $250 per year to go against
eligible tuition and fees paid to learn
new skills, or enhance existing skills.
Futurepreneur Canada
In the December 2018/ January 2019
column, we discussed Futurepreneur, a
program targeting young entrepreneurs
to access funds to start or buy a business.
Budget 2019 has added $38 million over the
next five years to keep the program going.
Summary
Budget 2019 is clearly SME-friendly.
Companies in the graphics, printing and
associated support industries now have
even more opportunities to improve their
shop floor, develop new and innovative
products and processes, train their
workforce and take advantage of funding
opportunities to boost their business.
While all of the above-mentioned oppor-
tunities exist for you, they also exist for
your competitors. Make sure you get
your fair share before the funds have
already been allocated to others and
you are too late. When it comes to
government funding support, it’s the
professionally ready early bird gets the worm.
Elliot Schiller is a Director at Toronto’s Teeger
Schiller Inc., a firm specializing in
government funding and systems selection
/ implementation. His clients receive over
$5 million annually to support ongoing
business innovation.
E-mail [email protected], visit www.FundingHelp.ca
or phone 1-888-816-0222 Ext. 102
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