Directed Funding

On March 29, the government unveiled the 2012 budget, dubbed the Economic Action Plan 2012.

If you are a small business focussed on innovation, there are a number of tax incentives and support programs that you could benefit from over the next five years. Here is an overview summary of what budget 2012 has in store.

Directed Funding for Innovation

There were a number of innovation funds which saw an increase in funds as a result of budget 2012, including:
 

• Industrial Research Assistance Program (IRAP): Investment has been doubled in the 2012 budget and is now valued at $110 million per year.
   
• National Research Council (NRC): Investment of $67 million for 2012-13 has been pledged to refocus on "business-led, industry-relevant research".
   
• Canadian Innovation Commercialization Program: Piloted in 2011, this program has become permanent with a commitment of $95 million over the next three years. An additional $40 million has then been pledged per year thereafter.

Business Financing

Recognising the impact that venture capital funding has on helping businesses grow in the early stages of their development, the government has pledged $400 million to attract more private sector investors to early-stage risk capital.  Over the coming months, the government will consider how to structure this support, in order to incentivise investors and the management of large-scale venture capital funds.

 

In addition, $100 million has been pledged to the Business Development Bank of Canada (BDC) to support its venture capital activities, and support the creation of large-scale venture capital funds led by the private sector.