The proposed 2009 Ontario provincial budget, released March 26th, 2009, puts forward new tax measures intended to build on the government’s “5 point” economic plan. Understandably there is much controversy about the spending plans, and many Ontarians are expressing concern over the Sales Tax Harmonization, and how it will affect the individual.
On a positive note, there are a few bright spots for Ontario’s diverse technology sector. Most importantly, to our readers, are the changes to the Ontario Innovation Tax Credit (OITC), a tax relief measure for businesses to encourage technological development and new innovations.
Ontario Innovation Tax Credit
The OITC is a 10% return for small to medium sized enterprises who perform qualifying SR&ED activities (Scientific Research & Experimental Development) in Ontario. The new budget proposes to extend the taxable income phase-out range from the current $400,000 – $700,000 to $500,000 – $800,000. This measure will parallel the changes and enhancements to the Federal Investment Tax Credit for SR&ED claims, proposed in the 2009 Federal budget.
Sustaining and Promoting Research and New Technology
Ontario’s technological advancements require continuous support. The new provincial budget is proposing more than $110 million in additional tax relief for 2009 and 2010, and $715 million in investments supporting partnerships in innovation, encouraging businesses to develop their new products, services, and processes.
These new investments are in addition to the $3 billion already to be provided by the Ministry of Research and Innovation. They will include:
- $300 million in capital funds over six years for research infrastructure, to leverage funding from the Canada Foundation for Innovation
- $100 million in extra operating funds over four years for research in the biomedical field. This funding, as well as aforementioned funds for the research infrastructure, will be delivered via the Ontario Research Fund.
- $250 million over five years for a new Emerging Technologies Fund that will put focus on clean technologies and clean energy, health and life sciences, and information and communication technologies (including digital media).
- $10 million over three years to the Colleges Ontario Network for Industry Innovation, to assist small to medium sized enterprises with applied research, technology and commercialization.
Quote for March 27th, 2009:
“The most terrifying words in the English langauge are: I’m from the government and I’m here to help.”
– Ronald Reagan