Ontario Budget 2024: $100 million-plus toward innovation, but is that enough?

Ontario Budget 2024: $100 million-plus toward innovation, but is that enough?

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The 2024 Ontario Budget was tabled last week, featuring more than $100 million in commitments toward the Invest Ontario Fund (IOF) and a bevy of research and development initiatives aimed at reversing lackluster growth being felt across Canada. 

Inflation and high interest rates have helped fuel the recent stagnation, which have both been cited as contributing factors to Ontario pushing back previous plans to balance the budget until 2026. 

This comes after Quebec—facing their largest deficit in history—similarly pushed off their budget balancing plans to at least 2028. In doing so, the province will restructure the Electronic Business Development Tax Credit (CDAE) and the Multimedia Tax Credit (CTMM), rebalancing the refundable and non-refundable portions to a 20:10 percentage split by 2028—and recouping the province $365 million in taxes claimed.

While Ontario’s Budget 2024 prioritizes infrastructure and healthcare, it’s still pushing to maintain the annual $100 million infusion the government gave to the IOF in 2023. Established in 2020, the IOF aims to bolster foreign expansion in manufacturing, life sciences, and tech within Ontario, with a $600 million valuation to date.

Aside from this nine-figure headline, however, many of the additional innovation funding initiatives outlined in Budget 2024 can be read as “keeping the lights on” rather than a full-throated infusion. 

For instance, another $12-million was outlined in Budget 2024 to create a Health Technology Accelerator Fund to help healthcare service providers access promising new healthtech solutions developed by Ontario innovators. Plans also included an additional $1 million per year into Ontario’s Regional Innovation Centres (RICs), while the province will also allocate $18 million over three years toward continued operation and maintenance of Ontario’s Advanced Research Computing systems. 

Is “status quo” enough to drive Ontario’s growth?

Budget 2024 was noticeably light on new initiatives, which was alluded to in comments from CCI president Benjamin Bergen.

“Innovators understand that there are competing priorities and a range of challenges that the Ontario government is navigating, and we did not expect 2024 to be an innovation-focused budget,” said Bergen in a statement. 

Of course, Ontario didn’t take measures as drastic as their neighbors in Quebec when they restructured legacy tax programs that many tech businesses in the region have come to rely on.

But without new support from provincial governments, combined with that previously mentioned inflation (plus high-interests and other economic challenges), innovative businesses will become increasingly reliant on existing federal innovation funding programs to achieve growth in the current market. 

Promises for angel investors, continued support

While it was status quo elsewhere, Budget 2024 did outline steps being taken by the Minister of Finance to work with the Ontario Securities Commission (OSC) to create rules supporting angel investor groups. This comes as manyangel funds in Canada face fewer federal government resources and are turning to the provinces for a lifeline. The document reads:

“…To encourage early-stage financing, the OSC is working to develop rules to support angel investor groups and broadening sources of capital by adopting a self certified prospectus exemption.  To support capital-raising for smaller issuers, the OSC is broadening investment dealer participation in prospectus offerings.”

Although angel investors are essential to help give early-stage startups lift, this funding resource is truly just a starting point, and not a long-term financing solution. 

Once more mature businesses in Canada are leveraging ecosystems like the accelerator programs and innovation funds on offer from Ontario to help drive their growth, they need to continue tapping into government resources wherever they can to finance growth. 

This includes non-dilutive funding, from grants like IRAP to the banner Scientific Research & Experimental Development tax credit. But accessing these resources shouldn’t become a drain on your human capital in the process.

Boast combines unmatched industry expertise with cutting edge technology to deliver more comprehensive, accurate and valuable R&D tax credit and non-dilutive funding claims. All of this is done with minimal time from the R&D experts driving innovation and growth on your team, with Boast customers saving up to 60 hours on average working with us to claim SR&ED.

Talk to an expert today to learn more about streamlining your access to the funding you need to grow.

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