The Big Picture
The Canadian government just unveiled the 2024 Fall Economic Statement, and while there are no new taxes (phew!), there are some pretty important updates for businesses, innovators, and clean energy investors. From bigger tax breaks for equipment to better incentives for research and development, this year’s statement is all about driving growth, innovation, and sustainability.
Let’s dive into the key highlights and what they mean for you.
1. Faster Write-Offs for Investments
Good news for businesses looking to invest in equipment or clean energy tech—tax write-offs are getting a boost.
Immediate Expensing: If you’re buying manufacturing equipment, clean energy technology, or zero-emission vehicles, you can deduct the entire cost (yes, 100%) as long as it’s in use before 2030.
Faster Depreciation: For other depreciable assets, businesses can write off their costs at accelerated rates through 2033.
Translation? If you’re planning big investments, the tax savings just got better. And considering the government is putting $17.4 billion behind this program over the next five years, they’re serious about encouraging growth and cleaner technologies.
2. More Support for Innovation: The SR&ED Boost
If your business is big on research and development (R&D), you’re in luck. The Scientific Research and Experimental Development (SR&ED) program is getting some upgrades:
The annual spending limit for CCPCs (Canadian-controlled private corporations) increases to $4.5 million (up from $3.0M).
Growing businesses benefit too—the phase-out thresholds rise to $15M for taxable capital and $75M for full elimination.
Capital expenses are back in the game, meaning equipment leases and shared-use property now qualify for tax credits.
What does this mean? If you’re innovating—especially in tech or clean energy—there’s more support to help fund your ideas.
3. Big Wins for Clean Energy
Canada’s focus on building a green economy continues, with more clarity and incentives for clean energy projects:
Clean Electricity Tax Credit: You can claim up to 15% refundable credits for eligible projects, provided your province meets net-zero goals.
EV Supply Chain Credit: There’s a 10% credit for major investments (at least $100 million) in electric vehicle assembly, battery production, and related materials.
Clean Hydrogen Tax Credit: Expanded eligibility now includes projects using methane pyrolysis to produce hydrogen.
These credits are a game-changer for businesses investing in clean tech or renewable energy—making the path to net-zero a little less costly.
4. A Helping Hand for Small Business Owners
If you’re selling shares in your small business and reinvesting, you’ve got more breathing room. Here’s what’s changing:
You can now buy replacement shares anytime in the year of the sale or the following calendar year.
Preferred shares are now eligible (not just common shares).
The asset threshold for businesses benefiting from these deferrals jumps to $100 million (up from $50 million).
In short? If you’re growing or transitioning your business, these updates give you more flexibility and bigger opportunities.
5. More CRA Audits Are Coming
To tighten things up, the government is putting $451.5 million into CRA audits over the next five years. This extra scrutiny includes revisiting COVID-19 emergency support programs, and they expect it to bring in an additional $2.9 billion in revenue.
The takeaway here? Make sure your tax filings are squeaky clean—because the CRA will be paying closer attention.
Looking Ahead
While there’s no talk of new tax hikes, some previously announced measures (like the capital gains inclusion rate increase) are still in limbo. With a possible federal election on the horizon, things could shift.
Final Thoughts
The 2024 Fall Economic Statement has some exciting opportunities, especially for businesses focused on innovation, clean energy, and growth. Whether it’s faster write-offs, better R&D credits, or more support for clean tech, now’s the time to take a closer look at how these changes can benefit your bottom line.
Stay ahead, stay informed, and make smart moves for the year ahead.
About
Nex CPA is a boutique Canadian digital accounting firm that provides online accounting solutions by combining technology and forward-thinking businesses. Tailored for the modern entrepreneur, we provide an easy, automated and client-focused service so you can focus on working 'on' the business and not 'in' the business.
For more information, please contact us at info@nex.cpa.
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