Did you know that public funding can help get your business off the ground? Sure, we’ve all heard the word funding, but you may not have heard about public funding. This type of funding is more than just getting a startup business loan. Instead, there are numerous tax credits and grants specifically designed to help you launch and grow a business.

This article aims to help you understand more about these opportunities. You’ll learn about federal and provincial tax credits, business grants, and other types of public funding that can help your business thrive.

Key Takeaways
  1. Canadian government financing options for your small business range from startup loans to tax credits and grants.
  2. While loans must be repaid, grants are funds available for use in your business.
  3. Tax credits often reduce the amount of taxable income you have, while some can generate an income tax return.

Funding in the form of tax breaks for small businesses

Tax credits are incentives designed to help your business grow. The terms “tax breaks” and “tax credits” are often used interchangeably, because tax credits can help your business reduce the income it owes taxes on. Other types of credits can produce an income tax refund, which helps your small business increase available cash.

Examples of small business tax credits include:

  • Scientific research and experimental development tax credit (SR&ED)
  • Apprenticeship job creation tax credit (AJCTC)
  • Canadian film and video production tax credit (CPTC)
  • Green energy tax credit
  • Agriculture tax credit

Let’s look at these types of tax credits further:

SR&ED tax credit encourages research and development

The Scientific Research and Experimental Development (SR&ED) tax credit is available to individuals, small businesses, corporations, and trusts. This tax incentive is designed to encourage scientific and technological development in all industries.

Apprenticeship job creation tax credit helps the overall economy

The Apprenticeship Job Creation Tax Credit (AJCTC) is an example of an investment tax credit. If your company invests in apprentices, it can qualify for up to $2,000 in tax credits for each eligible apprentice you employ.

Province- or territory specific tax credits support growth locally

In addition to federal tax credits, there are many credits available from the province or territory your business operates in. Here’s a short list:

Canadian film or video production tax credit (CPTC)

This credit is available in Manitoba, Ontario, and Quebec. Companies that produce films in Canada can receive a refundable tax credit of up to 45% on eligible labour expenses, depending on the province.

Manitoba green energy equipment tax credit

Property owners who have heat-pump or solar thermal energy systems installed in Manitoba may qualify for 7.5% to 15% of the installation costs as part of Manitoba’s green energy tax credit.

Agriculture-specific tax credits

On the books in BC, Prince Edward Island, and New Brunswick, these tax credits can help farmers, livestock producers, and agribusinesses pay less tax.

Examples of other province- or territory-specific tax breaks for small business

  • Small-business venture capital tax credit
  • Tax credits for book publishers
  • Tax credits for digital media production projects

There are more than 80 individual province- and territory-specific tax credits you’ll want to know about, so be sure to browse through all of them, on the CRA site.

The next finance option you’ll want to learn about is business grants.

Canadian small-business grants support new business growth

In addition to tax credits, your new business may qualify for a grant.

Getting a grant is like getting free money. And unlike tax credits, grants will not reduce taxable income or help generate an income tax return. Instead, business grants must be reported as income on your tax return.

Grants for small businesses can include funding for:

Government grants for small businesses touch all industries

Here are several examples of the different industries that are eligible for government grants:

  • Manufacturers creating new innovative products for commercial use
  • Companies supporting oceanic industries, such as fisheries, aquaculture, and shipbuilding
  • Businesses that want to adopt new technology
  • Farming operations that want to convert from conventional methods to organic

Specific grants for women entrepreneurs encourage diversity

The Native Women’s Association of Canada (NWAC) offers $10,000 to train women in a trade industry. For example, while a Manitoba program offers up to $50,000 to help women-owned Manitoba businesses start or expand, many other grants for women-owned ventures are available across Canada.

Startup business grants fund new ventures

You may be surprised at how varied the options are. Whether you want to establish a brand-new business or buy an existing one, there is probably a business grant for your needs.

If you’d like to start a Canadian book publishing business, for instance, you may qualify for $50,000 to help you get it off the ground.

Want to start a mineral-prospecting business? You’ll find grants available for up to $12,000.

There are many opportunities! The Canadian government website publishes a comprehensive list detailing the government grants that are available for small businesses.

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