Business Tax

Tax Credits Every Small Business Should Know

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What Is the SR&ED Tax Credit?

The Scientific Research and Experimental Development (SR&ED) program is Canada's largest tax incentive. CCPCs can earn 35% refundable credits on the first $3 million of qualifying R&D expenditures. Qualifying activities include developing new products, improving processes, and resolving technological uncertainties.

What Hiring Credits Are Available?

Several programs reduce the cost of hiring: Canada Summer Jobs (wage subsidies for student hiring), Youth Employment Program credits, various provincial hiring incentives. Check with your province for additional programs.

What Is the Apprenticeship Job Creation Tax Credit?

Employers can claim a non-refundable tax credit of 10% of eligible apprentice wages, up to $2,000 per year per apprentice. Applies to apprentices in Red Seal trades during the first two years of their program.

Clean Technology Investment Tax Credit

New for 2023-2034, businesses can claim a refundable tax credit of 30% on investments in clean technology equipment. Qualifying equipment includes solar, wind, hydro, geothermal, heat pumps, and zero-emission vehicles for business use.

Frequently Asked Questions

What is the SR&ED tax credit rate for small businesses?

CCPCs can earn a 35% refundable tax credit on the first $3 million of qualifying SR&ED expenditures. The enhanced rate makes this one of the most generous R&D incentives globally.

What qualifies for SR&ED credits?

Qualifying activities include technological advancement, experimental development, and resolving technological uncertainties. This can include software development, engineering projects, and product improvements involving technical challenges.