Canadian Budget Would Reduce Small Business Taxes

Finance Minister Chrystia Freeland released the Canadian government’s 2022 budget on April 7. Find the budget here. Items of interest to the industrial metals community include:

• Strengthening Canada’s trade remedy regime.
• A reduction in the federal tax rate of nine percent on small businesses’ first $500,000 of taxable income.
• A plan to ease the current phase-out rules related to the small business tax rate, with access to the lower rate fully phased out when taxable capital reaches $50 million, rather than at $15 million.
• A 30 percent tax credit for investments in clean technology and a refundable tax credit for Carbon Capture, Utilization, and Storage (CCUS) that will support manufacturers as they work to decarbonize their industrial processes.
• A new Labor Mobility Deduction, which would provide tax recognition on up to $4,000 per year in eligible travel and temporary relocation expenses to eligible tradespersons and apprentices.
• A proposed investment of $84.2 million over four years to double funding for the Union Training and Innovation Program, which would help 3,500 apprentices from underrepresented groups annually.
• A new Canada Growth Fund aimed at attracting private sector investment in new and traditional sectors, including manufacturing, as well as to support the restructuring of critical supply chains.

According to the organization Canadian Manufacturers and Exporters, while the budget includes significant resources to address supply chain challenges and to help small manufacturers, it does not include adequate funds to address the manufacturing industry labor shortage, which now tops 81,000 job vacancies.