Archive for the ‘ontario’ Category

Quebec Budget 2018 Highlights

The 2018 Quebec Budget, tabled on March 27, 2018, reports accelerated gross domestic product (GDP) growth from 1.4% in 2016 to 3% in 2017 and proposes several measures and investments that will impact businesses in Quebec including:

Innovation

  • Increasing the additional capital cost allowance rate from 35% to 60% for investments in computer equipment and manufacturing and processing equipment made after March 27, 2018.
  • Expanding tax holiday eligibility for large investment projects to include the development of digital platforms (“a computing environment that enables content management or use of a service that serves as an intermediary in accessing information, services, or property supplied or edited by the corporation or partnership, or by a third party, and which is not a tax-exempt platform”).
  • Broadening the tax credit for film and television production to include digital platforms.
  • Providing $348.7M for the implementation of a new biofood policy, including:
    • $180M to spur investment in biofood production and processing;
    • $62.8M to stimulate the development of the biofood industry; and
    • $29.7M to enhance efforts in innovation and training.
  • Committing $171.5M over 4 years to increase the appropriation and marketing of innovations including:
    • $120M to promote mobilizing projects in Québec;
    • $22.5M Support the restructuring the business model of the Centre de recherche industrielle du Québec (CRIQ);
    • $3.5M increase in financial support for niches of excellence in the regions;
    • $5M to support creation of the World Artificial Intelligence Organization in Montréal; and
    • $20.5M Support the Université de Sherbrooke’s project of an integrated innovation chain for digital prosperity.

Business Growth 

  • Reducing payroll taxes through:
    • A $1.2B reduction in the Health Services Fund (HSF) contribution for all small to medium-sized businesses (SMBs); and
    • A gradual reduction of the tax rate of SMBs in the service and construction sectors from 8% to 4%. The tax rate of SMBs in the manufacturing sector was reduced from 8% to 4% effective April 1, 2015, and was likewise reduced for SMBs in the primary sector effective January 1, 2017.
  • Stimulating growth of SMBs via:
    • $10M over 5 years for the creation of Réseau200, which will bring together entrepreneurs and their peers from the business world;
    • $35.4M for initiatives to support accelerators and incubators for Québec businesses;
    • An additional $2.4M over 3 years to support the creation of centres of excellence in the information and communication technologies (ICT) and digital technologies sectors; and
    • $3.4M to support SMBs in their growth projects.
  • Providing additional sums for specialized investment funds in collaboration with other investors, namely:
    • $61.5M for Teralys Capital, a private fund manager investing in innovative businesses;
    • $2M for the Accélérateur de création d’entreprises technologiques (ACET) Capital II fund to help technological entrepreneurs find adequate financing for starting their business; and
    • Support for development of social economy enterprises including continued support for the Chantier de l’économie sociale Trust and support for activities of tax-advantaged funds.
  • Enhancing electricity discounts for major projects, including:
    • An adjustment in the maximum duration of the discount for large projects, which is extended from four to six years; and
    • A 4 year deferral of the discount application period end date, which is moved back to December 31, 2028.

Workforce Development

  • Contributing $810M for a National Workforce Strategy to meet the challenges of the labour market, including:
    • Commitments to improve the flexibility of vocational and technical studies programs; and
    • Implementation of a new process for receiving and processing immigration applications under the Regular Skilled Worker Program which, once implemented, will also provide business and employment integration support (more details will be released in April 2018).
  • Creating a new refundable tax credit for training workers, via enrollment in a training program that leads to a diploma, employed in SMBs to support 30% of eligible training expenditures incurred between March 27, 2018 and January 1, 2023, with up to $5,460 provided per year for each eligible employee (30% rate is linearly reduced where total payroll exceeds $5M, reaching 0% at a total payroll of $7M).
  • Improving refundable tax credits for on-the-job training periods (internships) through:
    • Increasing maximum hourly rates and weekly caps;
    • Increasing base and increased tax credit rates for businesses that operate in remote resource regions, to encourage training young people; and
    • Increasing base and increased tax credit rates for Aboriginal people, to encourage Québec businesses to facilitate their employment integration.

Ontario Budget 2018 Highlights

The Ontario 2018 Budget, tabled on March 28, 2018, projects a growing deficit over the next three years and is predicted to resume a downward trend in 2022 with accumulated deficit expected to decline from 23.2% of gross domestic product (GDP) in 2017-18 to 22.1% by 2022.

The Ontario Budget proposes several measures and investments that impact businesses, including:

Innovation

  • An increase to the Ontario Research and Development Tax Credit (ORDTC) from 3.5% to 5.5% for eligible R&D expenditures over $1M (per taxation year) incurred on or after March 28, 2018.
  • Enhancements to the Ontario Innovation Tax Credit (OITC) for eligible R&D expenditures incurred on or after March 28, 2018 based on the ratio of R&D expenditures to gross revenues. Companies with a ratio of R&D expenditures to gross revenue of:
    • 10% or less will continue to claim the OITC at a rate of 8%;
    • 10-20% will be eligible for an enhanced OITC rate that will increase from 8% to 12% on a straight-line basis; and
    • 20% or more will be eligible to claim the OITC at a rate of 12%.
  • Expansions to the Ontario Interactive Digital Media Tax Credit (OIDMTC) eligibility criteria to include broadcaster purchased or licensed film/television websites that host film, television, or Internet production content not previously assessed (before Nov 1, 2017).
  • A review of various tax incentives implemented in other jurisdictions such as preferential corporate income tax rates (i.e., patent boxes), tax refunds, tax deductions, and exemptions with the intention of developing a provincial incentive to encourage Intellectual Property (IP).
  • An additional $50M over 10 years for the New Transformative Technology Partnerships Fund for businesses, SMEs, and scale‐ups as well as post-secondary and research institutions to collaborate on new dynamic products and services in artificial intelligence (AI), 5G wireless communications, autonomous vehicles, advanced computing, and quantum technologies.

Business Growth

  • In parallel with the 2018 Federal Budget proposal to phase-out or grind the $500,000 small-business limit, the Ontario Budget proposes to phase out the small-business limit on a straight-line basis for CCPCs (and associated corporations) earning between $50,000 and $150,000 of passive investment income in taxation years beginning after 2018.
  • Ending the electricity debt retirement charge (DRC) for mid-sized commercial and industrial non-ICI or non-RRP, Class B consumers as of April 1, 2018.
  • An additional $100M over 10 years for the Eastern Ontario Development Fund (EODF) and the Southwestern Ontario Development Fund (SWODF) to support regional economic development by creating jobs, attracting private sector investment and promoting innovation, and encouraging collaboration and cluster development.
  • An additional $500M over 10 years for the New Economy Fund for investing in priority sectors such as advanced manufacturing, information and communication technology (ICT), life sciences, and clean-tech.
  • An additional $85M over 3 years for the Northern Ontario Heritage Fund to stimulate economic development and diversification across the region.
  • An additional $100M over 10 years for a new Greater Toronto & Hamilton Area Fund to support SMEs in the GTA and Hamilton area.

Export Market

  • Work to implement a Global Trade Strategy to diversify and promote trade in Ontario. This will include the Accelerate to International Markets program, the Global Growth Fund, and the Magnet Export Business Portal.

Startup Support

  • An additional $85M over 10 years for a new Venture Technology Fund to support a select number of very high‐potential, fast‐growing firms in expanding to become globally competitive.
  • An additional $15M over the next 3 years to NextAI, a Toronto based accelerator for early stage startups that leverage AI technologies.

Workforce Development

  • An additional $170M over 3 years for the new Ontario Apprenticeship Strategy to support transition into apprenticeship from high school, make the system easier to navigate, and to improve access for apprentices to high‐quality jobs upon completion.
  • Transforming the Apprenticeship Training Tax Credit (ATTC) into the new Graduated Apprenticeship Grant for Employers (GAGE) to encourage employers to ensure that apprentices complete their training.

SWODF Supports Expansion Projects in Southwestern Ontario

Southwestern Ontario companies that are looking to invest in an expansion project at their facility should consider the Southwestern Ontario Development Fund (SWODF). The focus of the program is to support job creation, innovation, and economic development in Southwestern Ontario. The SWODF will fund up to 15% of eligible project costs to a maximum of $1.5 million.

Companies that are operating in the following sectors are eligible for funding: advanced manufacturing, life sciences, processing (primary and secondary), tourism, information and communications technology, and cultural industries. In order to be eligible for the program companies must: employ at least 10 people, create at least 10 new jobs, spend at least $500,000 on the facility expansion, and provide a project timeline that extends over a two to four year period. If the company is looking to invest over $10 million in the project and create more than 50 new jobs, a loan of up to $5 million may be available.

NorthBridge Consultants has assisted companies in successfully obtaining SWODF funding. Our team is able to provide the necessary guidance in completing and submitting an application for this funding program. We can assist with the identification of funding opportunities, the completion of the application, the preparation of financial projections, and the required reporting after application submission.

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Youth Employment Fund Helps Connect Employers with Skilled Young Workers

Through the provincial Youth Employment Fund (YEF), employers in Ontario can receive up to $6,800 to offset training and wage costs linked to a job placement for a young person. To be eligible for this hiring incentive funding, employers must be licensed to operate in Ontario and be compliant with health and safety and employment standards legislation. They must also be covered by safety insurance and provide job placements of four to six months in Ontario that do not displace current of laid-off employees. Hires must be unemployed residents of Ontario between the ages of 15 and 29 and cannot be attending school full time.

Job placements provided will be assessed for the quality of the placement opportunity, the employer’s previous track record with the program, the potential for employee retention after the placement ends, and the level of employer financial contribution. There is no set formula for whether funding is used for training or wages, and there is no limit to the number of placements an employer can take on.

Our NorthBridge team of business analysts can assist you with the YEF application process. For more information on this or the many other hiring grants offered by the Federal and provincial governments, contact us today.

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Job Creation A Priority for All Ontario Electoral Candidates

Wednesday marks the beginning of the 2014 Ontario election campaign as Lieutenant Governor David Onley signed the official election writs.  Although all of the candidates began campaigning when NDP leader Andrea Horwath announced she would not support the proposed provincial budget, this signing was necessary to formally complete the process. The party leaders wasted no time beginning their tours of the province, and already one thing has become abundantly clear: no matter the outcome of this election, job creation will be a top priority.

Finance Minister Charles Sousa tabled the proposed provincial budget last Thursday. Among the initiatives listed in the budget was a $2.5 billion “Jobs and Prosperity Fund” aimed at supporting job creation across the country. Despite both the NDP and Conservatives’ lack of support for the budget, it appears that Wynne’s opponents share similar views on job creation.

Progressive Conservative leader Tim Hudak was quoted today as saying that his campaign will centre on “laying out in detail how [his] plan is going to work to get people back to work.”  Similarly, Andrea Horwath of the New Democrat Party has placed jobs and affordability for families at the core of her campaign.  Horwath announced that, if elected, the NDP will implement a Job Creation Tax Credit program to offer incentive to businesses to create jobs at home.  During a visit to Niagara Falls, Horwath noted her increasing concern for high rates of unemployment in Ontario, indicating her commitment to working with “the real job creators” to address the problem.  The new initiative, if implemented, will cover 10% of a new hire’s salary to a maximum of $5000 per job.

It appears that even the most divided of electoral candidates can agree that jobs must be a provincial priority.  We may be able to look forward to some serious investment in job creation very soon.

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