Government of Canada releases fall economic statement to support small business

BY PAUL JUNOR

In November 2022, Chrystia Freeman, Deputy Prime of Canada and Minister of Finance released the 2022 Fall Economic Statement (FES).

There were significant changes announced to help Canadians maintain the recovery from the: economic, social, and financial fallouts from the COVID-19 pandemic. The Government announced it would engage in the following:

• Continue EI and pension payments
• Enhance veteran’s benefits
• Double the Canada Student Grant
• Enhance the Canada Workers Benefit
• Increase both Old Age Security and the Guaranteed Income Supplement
• Deliver a Multigenerational Home Renovation Tax Credit
• Introduction of a new Tax-Free First Home Savings
• Eliminate interest on the federal portion of Canada Student Loans and Canada Apprentice Loans
• Create a new, quarterly Canada Workers Benefit

In addition 4.2 million Canadians will see an increase in their pay, and 11 million struggling Canadians will receive more financial assistance. The Fall Economic Statement acknowledges that the April 2022 budget anticipated reducing Canada’s deficit to a mere 2% of GDP this year. It is now predicted that it will be 1.3% of the $2.8 trillion dollar economy.

There has been the addition of 400,000 more jobs to the Canadian market and there has been an increase by 103% in the economy compared to the pre-COVID-19 levels.

On Thursday, November 17^th, Ruby Sahota, Member of Parliament issued a press release that listed four areas in which there will be targeted and focused investments to help our businesses: start up, scale up and access new international markets.

These are:

1.Lowering credit card transaction fees for small businesses

The government will enter into negotiations with the credit card industry, and with businesses, to find a way to lower transaction costs for businesses. If this does not lead to a negotiated outcome they will move forward with regulating credit transaction fees in the coming year.

2. Response to the Inflation Act (Clean Tech Investments)

FES 2022 makes a clear commitment to ensuring Canada’s global competitiveness. In light of the passing of the Inflation Reduction Act in the United States, our government will make the following investments:

(i) The Investment Tax Credit for Clean Technologies

This proposes a refundable tax credit equal to 30% of the capital cost of investments in Electricity Generation Systems and Industrial zero-emission vehicles.

(ii) The Investment Tax Credit for Clean Hydrogen

There are consultations on how best to implement an investment tax credit for clean hydrogen. The U.S. Inflation Reduction invented heavily in clean hydrogen, introducing

Carbon intensity tiers to guide the level of investment. This is a system that Finance is considering.

3. Sustainable jobs

Through FES, they are officially outlining the: design, operations, and investment strategy of the Canada Growth Fund initially announced in the 2022 Budget

4. Launching a Canadian Innovation and Investment Agency

Through FES they are officially launching the Innovation and Investment Agency, which will help some of Canada’s most innovative companies scale up, commercialize, grow, and create jobs in a changing global economy.

Anyone interested in learning details the Fall Economic Statement (FES) can check:

Website: budget.canada.ca