Canadian 2024 Federal Economic Statement: Business Grants, Tax Credits, and Loan Changes

On December 16^th, the 2024 Federal Economic Statement was released to address Canada’s evolving economic challenges. This statement introduces targeted grants, loans, and tax credits to strengthen Canadas core economic industries, enhance clean energy investments, and support innovation across the country. These measures provide much-needed relief for businesses while laying the groundwork for long-term growth and competitiveness.

Below you can find a breakdown of the most impactful business funding programs and initiatives announced in the statement as recapped by the Ryan Canadian Business Funding team:

Small Business Financing and Relief Initiatives

The statement included three new initiatives to provide financial relief, reduce operational costs, and create opportunities for small businesses across Canada to reinvest in growth and innovation.

• Canada Carbon Rebate for Small Businesses
  To provide better support, businesses with fewer than 20 employees will receive a base payment equivalent to that of a 20-employee organization. This ensures that smaller businesses benefit more substantially from the rebate.
• Credit Card Fee Reductions
  The government is considering legislative measures to ensure payment processors pass on savings from reduced credit card fees to small businesses, ensuring fairness across the financial system.
• Capital Gains Rollover Expansion
  The capital gains rollover provision has been expanded, increasing the eligible asset limit to $100 million and extending the reinvestment period to one full calendar year following the disposition.

Changes to SR&ED Tax Credits and AI Funding for R&D and Tech Adoption

The largest single source of funding for Canadian business comes from the SR&ED tax credit program, which has recently received an exciting update to increase the amount of annual expenditures included in the program and increasing the programs eligibility. This change to the program, and additional funding for AI adoption to help Canadian businesses improve productivity, offset internal R&D costs with tax credits, which will result in local businesses having a competitive edge in global markets.

• Significant enhancements to the Scientific Research and Experimental Development (SR&ED) program, with the biggest changes summarized below:
  • Raising the annual expenditure limit to $4.5 million;
  • Extending eligibility to public corporations; and
  • Reintroducing capital expenditure eligibility for tax credits and deductions.
    These changes aim to make innovation more accessible for Canadian businesses, especially in high-growth sectors.
• Artificial Intelligence (AI) Grants and Tax Credits to offset the costs for Adoption and AI development projects. Overview of funding is as follows:
  • $15 billion in combined government and pension fund investments will accelerate AI data center projects.
  • The AI Compute Access Fund will provide $300 million to help small and medium-sized businesses scale their AI adoption.
  • Additional funding of $700 million will support AI commercialization efforts through the Strategic Innovation Fund.
• Digital Adoption Funding through BDC for Canadian SMEs
  Up to $500 million will be available over four years through the Business Development Bank of Canada (BDC) to help small businesses adopt advanced digital technologies, with a priority on AI tools.

Investment Tax Credits

These federal tax credits provide businesses with opportunities to invest in clean technologies, reduce costs, and increase competitiveness in the global clean energy market, aligning with Canada’s net-zero commitments.

• Clean Hydrogen Investment Tax Credit Expansion
  The Clean Hydrogen Investment Tax Credit now includes methane pyrolysis, an emerging clean technology that splits methane into hydrogen and solid carbon. This expansion positions Canada as a leader in innovative hydrogen production.
• EV Supply Chain Investment Tax Credit
  A new 10% refundable tax credit will cover eligible building costs for businesses involved in three key electric vehicle (EV) supply chain areas:
  • EV assembly,
  • EV battery production, and
  • Cathode material production.
• Accelerated Investment Incentive
  The government has fully reinstated the Accelerated Investment Incentive until 2030, followed by a gradual four-year phase-out. This allows businesses to deduct capital expenses faster, improving cash flow and enabling immediate investment into growth and productivity.

Canadian Home Construction Financing Programs

These financing programs enable businesses in the construction sector to increase housing supply, reduce barriers for homeowners, and meet growing demand for affordable living spaces.

• Apartment Construction Loan Program
  To accelerate housing construction, the government has announced $2 billion in low-cost financing to fund approximately 4,000 new homes. This financing ensures that builders can break ground faster, addressing Canada’s housing supply shortage.
• Canada Secondary Suite Loan Program
  The loan program has been doubled, providing up to $80,000 in low-interest loans at just 2% interest to homeowners adding secondary suites, such as basement apartments or laneway homes. This encourages gentle densification in urban and suburban areas.

Indigenous Loan and Funding Programs

These programs improve access to financing for Indigenous communities, enabling greater economic participation and housing development while supporting long-term growth.

• Indigenous Loan Guarantee Program
  Officially launched with $5 billion in loan guarantees, this program empowers Indigenous communities to participate in major natural resource and clean energy projects by reducing borrowing costs.
• Affordable Housing Pre-Development Support
  An additional $50 million will be available over two years for affordable housing providers to cover pre-development expenses, including planning, design, and regulatory approvals.

Conclusion: The 2024 Federal Economic Statement is Helping to Create a Stronger More Efficient Canada

The 2024 Federal Economic Statement highlights the government’s proactive approach to supporting Canadian businesses through grants, loans, and tax credits. These measures not only provide immediate economic relief but also set the stage for long-term growth in clean energy, housing, and innovation.

For assistance in applying for these funding programs, or any of the other programs included in our business funding program directory, speak with a member of our government funding associates about government funding opportunities for your business in 2025 and beyond.