Archive for the ‘Information Technology’ Category

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.

Breakfast Seminar in Vancouver- Financing Solutions for Technology Companies

Join us for an insightful presentation with Canada’s top financial houses servicing the technology sector.
Hosted by MNP, learn about a range of alternate funding options available.

Date: Tuesday, January 17, 2017

Time: 7:30 a.m. to 9:00 a.m.

Location: MNP Tower
Suite 2200 MNP Tower
1021 West Hastings Street
Vancouver, B.C.

Panelists include Jonathan Schubert from RBC, Jill Earthy from Frontfundr, Caterina Papadakos from Espresso Capital, and Jaap Siekman from NorthBridge Consultants.

A light breakfast will be served.  For more information and to RSVP, please contact us at jaap@northbridgeconsultants.com

Newfoundland and Labrador Interactive Digital Media Tax Credit

Originally announced as part of the 2015 Provincial Budget released in April, the government of Newfoundland and Labrador has recently finalized and implemented a new interactive digital media tax credit to support businesses in the competitive digital media industry. The Newfoundland and Labrador Interactive Digital Media (IDM) Tax Credit will offer a 40% refundable rate on eligible labour and remuneration costs incurred while developing an eligible product between January 1, 2015 and December 31, 2019.

The credit will be available to taxable, interactive digital media development companies with a permanent establishment in NL who have registered with the NL Film Development Corporation. For a product of such a company to be eligible for the new tax credit, the product will have to meet the following qualifications:

  • The interactive product has the primary purpose to educate, inform, or entertain;
  • The interactive product presents information using at least two of text, sound, and images;
  • The interactive product is intended to be used by individuals for purposes other than interpersonal communication and is non-promotional; and
  • The interactive product must provide feedback to the user, allow the user to control what information is presented and when, and the product must adapt to the user’s needs (if appropriate).

Not all products that meet the above criteria are eligible, so please consult the NLIDM website for a complete explanation of eligibility.

If a product is eligible, the credit can be awarded up to a value of $40,000 per employee, with a maximum of $2,000,000 in labour and remuneration claimable. While employee labour is claimable up to 100% of development time, it should be noted that remuneration costs will only be claimable to a maximum of 65%. Unlike other provincial IDM programs, the NLIDM credit must be claimed in respect of the year that the expenses were incurred and this claim must be submitted to the Minister of Finance within six months of the end of the taxation year.

While the tax credit is currently managed by the Ministry of Finance, it will transition to the CRA beginning in May 2016. This means that digital companies in Newfoundland and Labrador should try to not only take advantage of this new program, but also look at Scientific Research and Experimental Development (SR&ED) tax credits, which are also filed with the CRA. With a 15% provincial SR&ED top-up available, companies that submit claims under both these programs can benefit from significant tax returns to continue innovative product development.

Linking Government Grants to SR&ED: Digital Media Sector

Over the last twenty years, indirect funding has become the most common source of funding for eligible research and development (R&D) work. The Scientific Research and Experimental Development (SR&ED) tax incentive program has been used as one of the main indirect funding sources by countless companies performing R&D. Although SR&ED continues to help companies remain competitive through supporting innovative development, direct funding from repayable and non-repayable grants is beginning to gain momentum.

In Canada, companies in the digital media industry can benefit from both direct and indirect funding. Currently, digital gaming for online, mobile platforms is making major headway in Canada. Game development relative to improvements in concurrency, presentation, processing power, cross-platform development, simulation and motion capture, as well as mobile or online gaming are eligible for indirect funding through SR&ED. Moreover, interactive digital media (IDM) companies can receive direct funding through the Canada Media Fund (CMF) to cover expenditures related to the development, production, and marketing of IDM products.

There are two streams in CMF: convergent and experimental. The convergent stream is for development projects, whereas the experimental stream provides funding for development, production, and marketing and promotion. Technology infrastructure, project audit fees, research and content preparation, salaries and benefits, and travel and accommodation are eligible expenditures. Additionally, IDM companies can receive funding through the experimental stream for expenditures related to the cost to put digital content online, such as copyright clearance and translation costs.

Upcoming Digital Media Events in Ontario

Digital media professionals do more than create software and content that entertain the masses. They also play a big part in helping medical professionals work together to improve patient care and save lives. On October 14, Interactive Ontario is hosting Interact: Hacking Healthcare in Toronto. This two-hour event from 6-8 p.m. is for digital media professionals who want to gain more knowledge on new opportunities relative to digital media innovations in the health care industry. In addition to networking, presentations will be delivered on DementiaHack as well as on obstacles in design that are affecting medical technology innovation in Canada.

Another event hosted by Interactive Ontario on October 14 is iLunch 14.7 – Rights Clearances and Insurance for Digital Content. This session will help professionals better understand the legal and insurance intricacies of clearing digital media content in Canada, including Errors & Omissions insurance coverage. The doors open at noon.

Interactive Ontario helps boost the interactive digital media industry in Canada. This not-for-profit association helps hundreds of companies in this industry by offering informative events, government advocacy, and opportunities relative to business development and partnerships. These companies develop a plethora of technology innovations, such as eLearning and virtual reality, which can be eligible for funding through the Scientific Research and Experimental Development (SR&ED) program.

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