From a presentation by Greg Clarke from SB Partners on the personal and business impacts of the most recent Federal and Ontario Provincial budgets on May 14, 2019

1. Silicon Halton Meetup:
Federal and Provincial Budget
Overview For Business
2019

2. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Agenda
1) Overview of Budgets – What are they and why are they
important?
2) Federal Budget
3) Provincial Budget
4) Programs
5) Questions

3. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Overview
 Budgets allow taxpayers to see how the government plans on using
tax funds
 Tool to push government policies
 Designed to focus taxpayer activities
 Address funding issues or imbalances

4. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Federal Budget
2019

5. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Federal Budget 2019
 Liberals feel the economy is doing well
 Large focus on tax credits
 Enhancements to existing business credits
 Additional resources to the CRA for monitoring and compliance

6. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Scientific Research and Experimental Development Tax Credit
 Current program allows for an enhanced credit for businesses
under $500K of taxable income
 Enhancement announced to remove this limit
 Company would still need to be a CCPC and have limits on
taxable capital of the company
 Results in increasing the access to the 35% enhanced SRED rate
instead of a reduction down to the 15% factor
 Applies to companies with year-ends ending on March 31/19 or
afterward.

7. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Zero Admission Vehicles
 Introduced a temporary enhanced write-off for zero-emission
vehicles to allow for a full write-off against taxable income in the
year of acquisition
 Passenger vehicles – limited to $55,000 in value
 Applies to acquisitions on or after March 31/19 for vehicles coming
into use by 2028

8. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Employee Stock Options
 Current rules allow for employee stock options to be taxed similar to
a capital gain at the time of disposition
 New rules will continue that tax effect with a cap of $200,000
 Intended to only affect large, mature companies
 Employees of start-ups or high-growth corporations would be
exempt from the new rule

9. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Accelerated Investment Incentive
 Accelerated tax deductions for capital asset additions in the first year
 Apply tax deduction rates to additions in the year at a rate of one
and a half times the addition
 Suspension of the half-year rule

10. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Ontario Budget
2019

11. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Ontario Provincial Budget 2019
 Provincial government is positioning the company for business
investment and growth
 New government looking to implement changes in policy and
spending
 Attempting to address the province’s debt

12. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Carbon Tax Cap & Trade
 Cancelled by the government
 Feds introduced the national carbon tax in response

13. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Minimum Wage Rate & WSIB
 Initially intended to rise in 2019 but the government repealed the
increase
 WSIB rate decreased to remove some of the burdens to business

14. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Ontario Job Creation Investment
Incentive
 Designed to reduce corporate income tax in the province by providing
an immediate 100 percent write-off for manufacturing and process
equipment, clean energy technology and an accelerated write-off for
most other assets
 Expected to provide approx. $3.8B in Ontario tax relief over a six year
period

15. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Reducing Compliance Costs
 Ontario government committed to providing business with $400M in
ongoing savings from compliance costs by reducing red tape
 New incentive plans expected to be introduced each spring and fall

16. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Reduced Tuition Fees
 Further investment in post-secondary education by reducing tuition
fees by 10 percent for domestic students
 Increased commitment to OSAP to continue to provide support to
students

17. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Programs

18. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Foreign Buyer Financing - EDC
 Provides financing for international sales to mitigate risk of non-
payment. The agency takes on the risk.
 Combined funding up to $130,000 of eligible expenses including
business travel to target markets, participation at trade fairs and
booth expenses.

19. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Ontario Tax Exemption for
Commercialization
 Provides financing for international sales to mitigate risk of non-
payment. The agency takes on the risk.

20. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
MaRS Investment Accelerator Fund
 Up to $500,000 in funding available for Ontario businesses in clean
tech, ICT, life sciences and healthcare sector

21. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Under 30 Start-Up
 Funding for start-ups by youth (under 30 yrs in age) to provide
funding up to $250,000 to young entrepreneurs with mentorship,
training and resources.

22. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Ontario Computer Animation & Special Effects Tax
Credit
 Refundable credit based on eligible Ontario labour expenditures
incurred with respect to computer animation and special effects
activities.
 Calculated at 18% of the eligible labour with no cap

23. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Hiring Programs
 Mitacs Funding Program – funding starting at $15,000 to focus on
research collaborations with skilled graduate and post-graduate
students.
 Canada-Ontario Job Grant – grant covers up to two-thirds of eligible
training costs up to a maximum of $10,000 per individual

24. SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019
Digital Technology Intern Program
 Provides a $12,000 grant to hire a digital technology intern for 6-12
months in a full-time position to fund up to 50% of their salary

25. Questions?
SILICON HALTON MEETUP
FEDERAL AND PROVINCIAL BUDGET
OVERVIEW 2019