Who should read this guide?
Essential Reading for Key Decision-Makers
● CEOs and General Managers: To guide business strategy toward investment-led growth.
● CFOs and Financial Directors: To capitalize on the new Productivity Super-Deduction and Capital Budgeting Framework.
● R&D and Innovation Leaders: To implement the modernized SR&ED framework and prepare for the National AI Infrastructure.
● Operations and Procurement Teams: To evaluate new opportunities under the Buy Canadian Policy.
● Investors and Foreign-Owned Property Holders: To understand the elimination of the Underused Housing Tax (UHT).
Why read this guide?
What business owners need to know
● Reduce Your Costs: Learn how the new “Productivity Super-Deduction” immediately lowers the cost of investing in essential equipment and technology.
● Maximize Innovation Funding: Discover the first major SR&ED program enhancements in over a decade, which can significantly increase your refundable credits.
● Unlock New Contracts: Position your products and services to benefit from priority access to federal contracts under the new Buy Canadian Policy.
● Simplify Talent Acquisition: Improve access to skilled talent and navigate new labour mobility rules easily.
● Align Your Strategy: Understand the government’s $1 trillion investment plan across AI and infrastructure to future-proof your growth.
What’s inside the guide?
The Federal Budget 2025 provides clear incentives for businesses ready to modernize and scale. In this guide, you will learn:
- Capital Investment: Details on the new Productivity Super-Deduction and the New Capital Budgeting Framework.
- SR&ED Modernization: A breakdown of the enhanced credit limit, eligibility expansion, and reintroduction of capital expenditures.
- Artificial Intelligence: Key investments to build sovereign public AI compute capacity and national cloud infrastructure.
- Procurement & Supply Chains: An analysis of the “Buy Canadian Policy” and the Small and Medium Business Procurement Program.
- Nation-Building Projects: Information on the Major Projects Office (MPO) to accelerate large infrastructure and energy project approvals.
- Workforce & Compliance: Updates on recognizing foreign credentials, restricting non-compete clauses, and the elimination of the Underused Housing Tax (UHT).
Don’t Wait to Realign Your Strategy!
Can Capital Expenditure be claimed as whole in first year or is it supposed to be in line with depreciable amount for the year ? keyboard_arrow_down
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With the new rules, capital expenditures associated with SR&ED projects can be claimed entirely in the first year.
How does the Federal budget affect companies with a year-end half-way through the year? keyboard_arrow_down
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These new SR&ED rules should not have any new impacts for year ends which are halfway or part of the way through the calendar year. The only thing to understand is only fiscal years which start on or after December 16th 2024 will be subject to these new rules.
Is enhanced limit from $3.5m to $4m applicable to companies whose year started before Dec 16, 2024 or it was proposed but actually increased to $6m instead? keyboard_arrow_down
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The $6M expense limit will be applied retroactively for companies whose fiscal year started on or before December 16th 2024. The $4M limit was in the first budget proposal, but was not implemented, instead the limit is set at $ 6M.
Can you write-off IP from 2025? keyboard_arrow_down
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As of the SR&ED legislation and the Clean Economy Investment Tax Credits, you still cannot directly expense IP acquisition or registration costs as eligible SR&ED or Clean Economy ITC expenditures for 2025. However, the 2025 Federal Budget proposes and extends a number of federal IP assistance initiatives that provide funding and advisory support to help innovative firms develop, protect, and commercialize their IP, indirectly helping with the costs of IP ownership and strategy.
These supports are separate from SR&ED itself, so while IP costs remain non-claimable under SR&ED, companies may be able to access these complementary IP programs to offset some of their IP-related expenses.
Talk to a specialist
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Does the Productivity Super Deduction apply to all types of equipment? keyboard_arrow_down
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No. This incentive is specifically designed for equipment that enhances productivity, such as manufacturing and processing machinery, and technology related to improving operational efficiency or production. It does not apply to real estate investments or assets that are not directly tied to increasing output or efficiency.
