These two provincial governments released their 2021 budgets at the end of March. We summarize here five of the main measures that will affect innovative SMEs in these two provinces:
1- Quebec:
Quebec’s 2021 budget relies on technologies to help all industries increase their productivity by undertaking their digital transformation:
1.1 SME smaller tax rate
First, the Government announces reducing the small business tax rate to the same level as in Ontario, from 4.0% to 3.2%. More than 70,000 SMEs will benefit from a reduction in their tax burden.
1.2 Accelerated amortization of investments
Also, the budget announces accelerated depreciation measures that considerably reduce the cost of investments made by Quebec companies. The area targetted are, among other things for computer equipment, manufacturing and processing equipment, clean energy production equipment.
1.3 The C3i credit rate doubled to accelerate the acquisition of new technologies by companies
Thirdly, set up as part of the 2020-2021 budget, the investment and innovation tax credit (C3i) encourages companies in all sectors to acquire new technologies. These must allow the digitization of their processes. production and management. They can also allow the modernization of their manufacturing equipment such as: manufacturing equipment, computer equipment and for the acquisition of a management software package.
With this budget, the rates established will double from 20% to 40% depending on the regions concerned, until December 31, 2022.
2- Ontario
2.1 Doubling the Ontario Small Business Support Grant
First, Ontario launched the Ontario Small Business Support Grant in January 2021, which provides a $10,000 to $20,000 to help eligible small businesses. Approximately 120,000 small businesses benefit from $1.7 billion in relief through this grant.
With the 2021 budget, the Ontario government is announcing the doubling of this measure. Small businesses who have been recipients of this Grant will automatically be entitled to a second payment in an amount equal to the first payment they received. They will not need to apply again to receive this additional funding.
2.2 Enhancing the Regional Opportunities Investment Tax Credit
Finally, in March 2020, Ontario introduced the Regional Opportunities Investment Tax Credit. he objective was to encourage business investment in areas of the province where employment growth lagged the provincial average. This is a 10 per cent refundable tax credit for corporations that build, renovate or purchase commercial or industrial buildings in certain regions.
Ontario is proposing to temporarily double the tax credit rate from 10 per cent to 20 per cent for eligible expenditures on assets that become available for use in the period beginning on March 24, 2021 and ending before January 1, 2023. Doubling the tax credit rate would double the available tax credit support for regional investment from a maximum of $45,000 to a maximum of $90,000 in a year.
Conclusion
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