If you’re running a startup, you’re probably more concerned with running your business than finding out what the government is up to, but if you happened to catch the 2016 Liberal budget reveal you would have been pleasantly surprised. While the favourable small business tax credit promised has been deferred, there were several items announced that should get the startup community excited.
This year’s budget is a good indication that the government is serious about fostering an innovation culture within Canada and an acknowledgement of the country’s growing shift from a manufacturing to service economy. The 2016 Liberal budget and its impact on Canadian business was addressed in a keynote speech given at the Toronto Region Board of Trade by the Innovation, Science, and Economic Development Minister, Navdeep Bains.
Among the plusses for startups, Bains revealed that the government has axed its plans to institute a tax on stock options and has promised $800 million over four year to fund incubators and clusters (although he did not specifically address which incubators would be eligible or how clusters would be formed). Another $95 million per year and $2 billion over three years is earmarked for projects poised to strengthen research and development within Canada. Bains spoke specifically to research and development, highlighting it as a priority moving forward.
“An area we struggle in is a decline in business investment for research and development (R&D), a lot of R&D and innovation is taking place in other jurisdictions and companies in Canada have record-high cash balances on record sheet, so they’re not investing and we don’t know why, but a lot of them say we’ll ‘acquire innovation.’”
The government is also putting faith in the future power of clean technology, specifically ICT and cleantech sectors, viewing those industries as economic growth engines. Over the next five years, $130 million has been dedicated to supporting clean technology research and development.
Bains also addressed concerns from later-stage businesses, commenting that Canada’s immigration policies will help bring in the talent needed for companies to grow.
“We’re going to get a holistic approach when it comes to our innovation agenda. There’s going to be a long approach focused on helping companies succeed not just in the short-term but in the long-term, and it’s going to be focused on the whole of government. Immigration is an example that helps companies that want to scale up and grow which benefits both large and small companies looking for appropriate talent.”
At Simply Laundry, we know all too well the impact particular government initiatives or programs can have on the success or failure of startups. In a company’s early stages, there are so many hurdles to overcome that restrictive government policies can make it all but impossible for some would-be startups to even get off the ground. We’re thrilled to see Canada taking strides towards becoming more welcoming to startups and fostering a culture of innovation. It will be exciting to see how the startup culture develops in Canada over the next several years and what future great ideas may bear the mark, “Made in Canada.”