Essential Tax Credits and Grants Every Small-Business Owner Should Be Aware Of

Mark Virgil Lofranco • 9 December 2024

Did you know that public funding could help kickstart your business? While many entrepreneurs are familiar with startup loans, fewer know about the wealth of public funding options available—specifically, tax credits and grants. These financial resources can be game changers for launching and growing your business.



This article will guide you through various tax credits, grants, and other public funding options that can support your small business.



Tax Breaks for Small Businesses: Tax Credits


Tax credits are financial incentives that reduce the amount of tax your business owes. In some cases, they can even result in a refund, increasing your available cash flow.


Here are some examples of small business tax credits:


  • Scientific Research and Experimental Development (SR&ED) Tax Credit: Available to businesses that engage in scientific or technological research and development, providing financial relief for R&D efforts.
  • Apprenticeship Job Creation Tax Credit (AJCTC): Your business can receive up to $2,000 in tax credits for every eligible apprentice you hire.
  • Canadian Film and Video Production Tax Credit (CPTC): Available in provinces like Manitoba, Ontario, and Quebec, this refundable credit can be as high as 45% of eligible labour costs.
  • Green Energy Tax Credit: Offered in Manitoba, this credit helps property owners offset the costs of installing energy-efficient systems like heat pumps and solar panels.
  • Agriculture Tax Credits: Available in provinces like British Columbia and Prince Edward Island, these credits provide financial relief for farmers and agribusinesses.



SR&ED Tax Credit: Encouraging Innovation


The Scientific Research and Experimental Development (SR&ED) tax credit encourages businesses to engage in innovative research and development. It’s available to individuals, corporations, and trusts across various industries, offering financial incentives for R&D activities.


Apprenticeship Job Creation Tax Credit: Building the Workforce


The Apprenticeship Job Creation Tax Credit (AJCTC) allows businesses to earn up to $2,000 in tax credits for each eligible apprentice. This credit supports workforce development while helping businesses reduce their tax burden.


Province-Specific Tax Credits


In addition to federal credits, provinces offer their own incentives to support local businesses. These include:


  • Canadian Film or Video Production Tax Credit (CPTC): Available in select provinces like Manitoba and Ontario, this credit supports film production by providing a refund of up to 45% on eligible labour costs.
  • Manitoba Green Energy Equipment Tax Credit: Property owners in Manitoba can receive a credit ranging from 7.5% to 15% of installation costs for energy-efficient systems.
  • Agriculture-Specific Tax Credits: These are available in provinces like British Columbia and Prince Edward Island to support farmers and agricultural businesses.


Business Grants: Free Money to Help You Grow


In addition to tax credits, your business may also qualify for grants. Unlike loans, grants do not need to be repaid and provide funds that can be used for various business initiatives.


Examples of small business grants include:


  • Search and Rescue Operations
  • E-Commerce Adoption
  • Organic Farming Initiatives
  • Women in Trades
  • Mining Operations


Government Grants for Various Industries


Here are some examples of industries that can benefit from government grants:


  • Manufacturing: Grants for developing innovative products for commercial use.
  • Oceanic Industries: Grants for businesses involved in fisheries, aquaculture, and shipbuilding.
  • Technology: Funding for businesses adopting new technologies to improve operations.
  • Farming: Grants for farmers converting to organic practices.


Grants for Women Entrepreneurs


Several grants are available specifically for women entrepreneurs. For example, the Native Women’s Association of Canada (NWAC) offers $10,000 for training women in trade industries. Similarly, programs in provinces like Manitoba offer up to $50,000 to help women-owned businesses grow.


Startup Grants


The Canadian government provides startup grants to help new businesses get off the ground. Whether you're starting a book publishing company or a mineral-prospecting venture, there’s likely a grant available to meet your needs.

For more information, visit the Canadian government’s website for a comprehensive list of available small business grants.

With tax credits and grants, your business can gain access to the financial resources needed for growth and sustainability. Be sure to explore these options to give your business a strong start!


Key Takeaways


  • Canadian government financing options for small businesses include startup loans, tax credits, and grants.
  • Grants do not need to be repaid and can be used for various business purposes.
  • Tax credits reduce your taxable income or can result in a tax refund, providing valuable financial relief.

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