The Canadian government allocates a portion of the Gross Domestic Product (GDP) to direct and indirect funding for businesses. Direct funding is made available in the form of repayable and non-repayable grants, while indirect funding is available in the form of tax credits. The most widely known indirect funding program is the Scientific Research and Experimental Development (SR&ED) tax credit- a $3 billion initiative, which supports companies that are investing in research and development; however, the Canadian government is starting to shift its focus from indirect tax credit programs to introduce new direct funding programs for businesses.

The SR&ED program previously allowed businesses to claim capital equipment expenditures but changes to the program, that came into effect January 1, 2014, eliminated capital equipment as an eligible expenditure. The government has since reallocated funds from indirect mechanisms towards direct funding programs like CME Smart and FedDev Ontario’s Investing in Business Growth and Productivity. The introduction of these programs has allowed businesses to apply for support for their capital equipment purchases alongside their yearly SR&ED claim submissions.  Furthermore, the purchase of capital equipment may be linked to the development of new (or the improvement of existing) manufacturing processes- the labour component of the process improvement projects may be eligible for SR&ED tax credits.

Our NorthBridge team of business analysts can help identify eligible projects for both SR&ED and grant funding programs. We also assist with the completion of application information, the preparation of financial information, the creation of business plans, and the required reporting after application submission.