Ensure tax measures are efficient and encourage innovation, trade and the growth of Canadian businesses.

What success looks like

Tax measures encourage innovation, trade, and the growth of Canadian businesses.

Government's narrative on progress

The government completed a whole-of-government review of business innovation programs to ensure that they are simple and effective and best meet the needs of Canada’s innovators. The review launched in Budget 2017 and results were announced in Budget 2018. The government also introduced a reduction of the small business tax rate from 10.5% to 10% as of January 1, 2018 and to 9% as of January 1, 2019. In the 2018 Fall Economic Statement, the government proposed three immediate changes to Canada’s tax system, in order to enhance business confidence in Canada: 1) allowing businesses to immediately write off the full cost of machinery and equipment used for the manufacturing or processing of goods; 2) allowing businesses to immediately write off the full cost of specified clean energy equipment to spur new investments and the adoption of advanced clean technologies in the Canadian economy; and 3) introducing the Accelerated Investment Incentive, an accelerated capital cost allowance for businesses of all sizes, across all sectors of the economy, that are making capital investments. Budget 2019 proposed to repeal the use of taxable income as a factor in determining a Canadian-controlled private corporation (CCPC)’s annual expenditure limit for the purpose of the enhanced SR&ED tax credit. As a result, small CCPCs with taxable capital of up to $10 million will benefit from unreduced access to the enhanced refundable SR&ED credit regardless of their taxable income. This change will provide a more predictable phase-out of the enhanced SR&ED credit rate, which will more effectively support growing small and medium-sized firms as they scale up.

Note: this is the government's own description, not an independent assessment.