The Canadian government introduced the 2021 Federal Budget in April. This year’s focus is on ending the fight against COVID-19 and ensuring economic recovery by creating jobs and growth in Canada. Business related budget themes include job creation, small businesses, and growth.
What does this mean for you as a business owner? Here are some budget highlights worth considering as they relate to you and your business.
Immediate Expensing of Certain Property
Canadian-Controlled Private Corporations can now expense certain eligible capital property. In the past, capital property was expensed over the useful life of the asset, allowing only a portion of the cost of the asset to be expensed during any given year.
Capital items included in this new measure are all depreciable property excluding what the government considers “long-lived” assets. Long-lived assets include buildings, pipelines, physical infrastructures, and goodwill. Any other capital assets purchased after budget day 2021 are eligible for expensing during the tax year purchased.
Canada Recovery Hiring Program
The goal of the Canada Recovery Hiring Program (CRHP) is to offer incentives for new hiring or wage increases for current employees. Eligible employers will receive a subsidy of up to 50% of the incremental remuneration paid to eligible employees between June 6, 2021 and November 20, 2021.
Canada Emergency Wage Subsidy (CEWS) and revenue declines experienced by the employer determine employer eligibility. Employers are entitled to the greater of the CEWS or the CRHP.
Mitacs Research and Training Opportunities
Mitacs, a non-profit organization, connects workers and innovative businesses willing to provide research and training opportunities in the AI industry. The proposed budget includes $708 million over five years for Mitacs to create 85,000 work-integrated learning placements.
Canada Digital Adoption Program
The pandemic has demonstrated how important it is for businesses to be online. As part of the budget, the Canadian government has committed to launching the Canada Digital Adoption Program. The program will provide Innovation, Science, and Economic Development funding to support costs and training associated with technology adoption.
The budget proposes to enhance financing opportunities available to Canadian businesses. Better financing opportunities allowing for investing in people and innovation so businesses can achieve growth.
We make it part of our job to stay current on tax updates and changes. If you have questions about how these federal budget changes impact your situation, fill out our contact form to get in touch.