What is in Budget 2021 for Business?
Helping Hard-hit Businesses Hire More Workers
For businesses that have been hit hardest by the pandemic, hiring the workers they need to grow is a cost they may worry about taking on. The government wants these businesses to be able to recover and grow by hiring more people so that workers are at the forefront of our recovery:
- Budget 2021 proposes to introduce the new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic. The proposed subsidy would offset a portion of the extra costs employers take on as they reopen, either by increasing wages or hours worked, or hiring more staff. This support would only be available for active employees and will be available from June 6 to November 20, 2021. Eligible employers would claim the higher of the Canada Emergency Wage Subsidy or the new proposed subsidy. The aim is to make it as easy as possible for businesses to hire new workers as the economy reopens.
Opportunities for Businesses and Young Workers Through Mitacs
Mitacs is a not-for-profit organization that connects young workers with innovative businesses for research and training opportunities. Mitacs focusses on supporting research-based innovation in industry and developing a talent stream of highly educated students and graduates through its internship programs. These students bring cutting-edge scientific and technical knowledge from universities and colleges that will strengthen the innovation capabilities of industry. This combination of innovation and skill development for the next generation of leaders will help drive growth now and ensure long-term competitiveness and prosperity.
- Budget 2021 proposes to provide $708 million over five years, starting in 2021-22, to Mitacs to create at least 85,000 work-integrated learning placements that provide on-the-job learning and provide businesses with support to develop talent and grow.
Helping Small and Medium-sized Businesses Move into the Digital Age
Canadian businesses need to adopt new technologies and digitize to meet customer needs and stay competitive. Embracing these changes also makes our businesses more efficient and more productive, and therefore more prosperous—and able to create more Canadian good middle class jobs.
To fuel the recovery, jobs, and growth, the government is launching the Canada Digital Adoption Program, which will create thousands of jobs for young Canadians and help as many as 160,000 small and medium-sized businesses adopt new digital technologies.
- Budget 2021 proposes to provide $1.4 billion over four years, starting in 2021-22, to Innovation, Science and Economic Development Canada, to:
- Work with organizations across Canada to provide access to skills, training, and advisory services for all businesses accessing this program.
- Provide microgrants to smaller, main street businesses to support costs associated with technology adoption.
- Create training and work opportunities for as many as 28,000 young people to help small and medium-sized businesses across Canada adopt new technology.
Budget 2021 proposes to provide $2.6 billion on a cash basis over four years, starting in 2021-22, to the Business Development Bank of Canada to help small and medium-sized businesses finance technology adoption.
Helping Businesses Seize New Technological Opportunities
Small and medium-sized businesses sometimes require unique technological or process solutions for their businesses that cannot be achieved by purchasing and installing available “off-the-shelf” solutions. These businesses can seize new opportunities by applying new research and technologies or developing them into valuable new products and services. This real-world innovation and technical development help businesses grow and become more competitive.
Much of this applied research is happening at Canada’s colleges, CEGEPs, and polytechnic institutes—institutions that have a strong presence in Canada’s small and rural communities.
To support applied research and development projects led by Canadian businesses in collaboration with colleges, CEGEPs, and polytechnics:
- Budget 2021 proposes to provide $46.9 million over two years, starting in 2021-22, to support additional research partnerships between colleges, CEGEPs, polytechnics, and businesses through the Natural Sciences and Engineering Research Council’s College and Community Innovation Program.
- Budget 2021 proposes to invest $5.7 million over two years, starting in 2021-22, to provide more businesses with access to the National Research Council’s Industrial Research Assistance Program’s Interactive Visits, where firms can access equipment, facilities, and expertise at college-affiliated Technology Access Centres.
Supporting Business Investments
For Canada’s economic recovery to take root, businesses will need to invest in new technologies and move forward with capital projects. Building on the significant tax incentives introduced in the 2018 Fall Economic Statement, additional support is needed to further boost business investments that will create jobs today and in the future.
- Budget 2021 proposes to allow immediate expensing of up to $1.5 million of eligible investments by Canadian-controlled private corporations made on or after Budget Day and before 2024. Eligible investments will cover over 60 per cent of capital investments typically made by Canadian-controlled private corporations.
Enhancing the Canada Small Business Financing Program
Small businesses need access to financing in order to invest in people and innovation, and to have the space to operate and grow. But many small businesses are facing financing challenges, especially Canada’s innovative, entrepreneurial start-ups that are built on intellectual property and other intangibles that could be the next world-changing ideas.
To make sure small business and independent entrepreneurs can access the capital they need to recover, innovate, and grow in the long-term:
- Budget 2021 proposes to improve the Canada Small Business Financing Program through amendments to the Canada Small Business Financing Act and its regulations. These proposed amendments are projected to increase annual financing by $560 million, supporting approximately 2,900 additional small businesses. They include:
- Expanding loan class eligibility to include lending against intellectual property and start-up assets and expenses.
- Increasing the maximum loan amount from $350,000 to $500,000 and extending the loan coverage period from 10 to 15 years for equipment and leasehold improvements.
- Expanding borrower eligibility to include non-profit and charitable social enterprises.
- Introducing a new line of credit product to help with liquidity and cover short-term working capital needs.
To read the Budget 2021 speech or to review the budget documents, please visit https://www.canada.ca/en/department-finance/services/publications/federal-budget.html