2024 marked a number of changes, with ongoing SR&ED consultations resulting in significant changes to the program, while proposals for federal funding focused on innovation and AI, in addition to investments in workforce development, training, and small business support. Notably, the clean economy investment tax credits were legislated this year, with more announcements to come in 2025. At North Group, we spent a busy year attending and hosting a number of different events and webinars, launching our new website, staying up to date with the latest innovation funding news, and working with dozens of companies to find their funding solutions. As we look back at big changes and interesting updates from the past year, we’d like to wish everyone a Happy New Year from the North Group team!

What changed with SR&ED?

Several SR&ED consultations were held throughout the year, to address the eligibility of larger and public companies, and the potential to include commercialization activities. As part of the 2024 Fall Economic Statement, several updates were announced, along with a $1.9 billion investment over the next six years, to implement the following changes:

  • Increased expenditures from $3 million to $4.5 million for the 35% refundable credit.
  • Expanded eligibility for the 35% refundable credit to include Canadian public corporations.
  • Increased taxable capital phase-out thresholds for determining expenditure limits, from $10 million to $15 million and $50 million to $75 million.
  • Reinstated capital expenditures eligibility, to include productivity-enhancing assets such as IT systems for machine learning in SR&ED projects.

Added to this, past claimants may also have the opportunity to file amended claims based on new definitions of what is considered government assistance. In October, the CRA also launched a Client Portal, which gives claimants access to organizational tools to facilitate SR&ED claims.

What were the federal priorities?

In both the 2024 Federal Budget and the Fall Economic Statement, several references were made to support for research and innovation, with a focus on artificial intelligence. This included proposed investments, new programming, and updates to existing programming. Added to these commitments, significant investments have been proposed to encourage investment in Canadian companies, train workforces, and support small businesses.

  • $2.4 billion was promised towards various AI programming, including $2 billion for the AI Compute Access Fund and AI Sovereign Compute Strategy, $200 million to accelerate AI adoption, $100 million for NRC’s AI Assist Program, and $50 million to support workers in sectors impacted by AI.
  • Investments in workforce development and training included $29.2 million beginning in 2025 to launch a training initiative through Talent for Innovation Canada and $90 million through Employment and Social Development Canada for apprenticeship placements.
  • To encourage investment, a new round of the Venture Capital Catalyst Initiative will be launched.
  • The Canadian Entrepreneurs’ Incentive will be launched in 2025 to assist innovators with business growth.
  • The Accelerated Investment Incentive will be reinstated in 2025 to write off certain machinery and equipment costs, including clean energy generation and zero-emission vehicles.
  • Funding will be provided to the Growth through Innovation Program to help businesses scale up, adopt technologies, improve productivity, and develop markets.

What’s new with funding programs?  

  • After an administrative pause issued in fall 2023, the release of Auditor General Karen Hogan’s report in June led to significant changes to Sustainable Development Technology Canada (SDTC). Previously a major source of funding for cleantech companies, SDTC is undergoing a transfer to the National Research Council.
  • Bill-C59 passed in June, which provided further details on the Clean Economy Investment Tax Credits in terms of credit rates and eligibility criteria. Additional updates provided further clarity on labour requirements for achieving the maximum credit rates, and how to calculate and claim the credit. More announcements will be made throughout 2025 about upcoming legislation for new credits including Clean Electricity, Expanded Clean Technology, Enhanced Clean Technology Manufacturing, and EV Supply Chain.
  • The Regional Development Agencies announced a new $200-million AI Initiative in November to support AI adoption and development as part of the $2.4 billion in investments proposed in Budget 2024.

What was happening at North Group?

  • NorthBridge held a webinars in collaboration with Bioenterprise, EMC, Mitacs, and more. Refresh your SR&ED essentials before filing for FY24 and learn to leverage grants along with your SR&ED claim. Follow our LinkedIn page to learn about more upcoming events.
  • We debuted our new website, where users can access content from NorthBridge, NorthSpring, NorthTech, and NorthVenture Studio through a unified North Group webpage. Stay tuned for more website updates throughout 2025.
  • Representatives from the North Group were present at events held by Communitech, Innovation Factory, Bioenterprise, DMZ, Manufacturing Masters, and more.                                                                                                                           
  • North Group attended major events including Collision 2024 and MaRS Climate Impact.