Many of the biggest Canadian technology-related items in the Government of Canada’s 2024 Fall Economic Statement (FES) were previously announced late last week.
These announcements include a renewal of the Venture Capital Catalyst Initiative (VCCI), Scientific Research and Experimental Development (SR&ED) tax credit reform, programs to encourage more private investment in mid-cap growth firms and pension fund support for artificial intelligence (AI) data centres.
But yesterday’s FES also included a slew of new Canadian tech-related commitments that might have been overlooked amid a day of political chaos that saw the feds lose and then gain a finance minister and closed with many unanswered questions regarding the future of Prime Minister Justin Trudeau and his Liberal government.
Setting aside those questions—including whether the commitments in the FES will actually come to pass—for now, BetaKit has broken out and highlighted some of the most notable new tech-related promises in the latest FES below. They include even more AI funding, government procurement reform, capital gains tweaks, and more money for Black entrepreneurs.
Boosting AI adoption
First, the FES included some sizeable new AI commitments. This includes $500 million CAD over four years starting in 2025–2026 for the Business Development Bank of Canada (BDC) to provide financing and expertise to SMBs looking to adopt tech, with a specific focus on AI. This comes shortly after BDC launched a new program to help SMBs figure out how to use AI.
The FES also includes $150 million over three years starting in 2024–2025 for the Global Innovation Clusters and $24 million over two years beginning in 2025–2026 for the national AI institutes.
These measures come in addition to the federal government’s previously announced $2.4-billion AI package in Budget 2024 that includes $2 billion for the Canadian Sovereign AI Compute Strategy and $405 million towards helping AI startups bring new tech to market, boosting AI adoption among SMBs, and other initiatives.
Reforming federal procurement
The FES also revealed that the feds plan to introduce the Small Business Innovation and Procurement Act, which would require federal departments and agencies to buy a minimum of 20 percent of goods and services from Canadian small and medium-sized businesses (SMBs) and 1 percent from innovative firms.
To support these efforts, a Small Business Innovation Program will be introduced to help federal departments and agencies meet these targets with regulatory changes and new procurement service standards. The feds plan to provide an update on this in spring 2025.
Capital gains and funding for Black entrepreneurs
On the capital gains taxation front, the FES outlined new rules to permit preferred shares to qualify as eligible small business corporation shares, increase the asset limit from $50 million to $100 million, and extend the reinvestment window to the end of the following calendar year. The Council of Canadian Innovators described this as “a small step toward a US-style QSBS framework.”
The FES also included $189 million over five years starting in 2025–2026 to Innovation, Science, and Economic Development Canada for the Black Entrepreneurship Program, which offers capital, mentorship, and financial planning services to Black entrepreneurs. Launched in 2020, the Black Entrepreneurship Program has been providing funding and support to Black entrepreneurs and SMB owners since then.
In addition to the new measures mentioned above, the feds also committed $29.2 million to train workers in areas like biomanufacturing, clean growth, and semiconductors; promised to reinstate the Accelerated Investment Incentive, which permits faster depreciation of capital investments; promised more details in the coming months regarding the Research and Science Capstone Agency; and indicated their intent to match United States tariffs and trade barriers.
RELATED: Feds struggle to table Fall Economic Statement following Minister Freeland’s shock departure
Returning to the question of whether or not all of these FES commitments will actually come to pass, the answer remains unclear. The federal government may be able to enact some of these measures on its own, while others could require legislation and be subject to votes at a time when support for Trudeau and the Liberals has been rapidly deteriorating.
“It is not entirely clear if the plan will ever see the light of day as some aspects would most likely require legislation,” wrote Scotiabank vice president and head of inclusion and resilience economics Rebekah Young. “That hinges on breaking the current Parliamentary stalemate under a minority government and securing enough support from other parties. This seems increasingly unlikely.”
The surprise resignation of Deputy Prime Minister and Finance Minister Chrystia Freeland hours before the already delayed release of the FES yesterday have thrown the Liberal government into turmoil. Since then, members of the Conservatives, NDP, Bloc Québécois, and multiple Liberal MPs alike have called on Trudeau to step down. Trudeau has yet to respond publicly to these calls and has reportedly considered prorogation or resignation. While he is not immediately stepping down, he is reportedly looking to reflect on yesterday’s events over the holidays.
Feature image courtesy Burst. Photo by Pegleess Barrios.
The post Four new Canadian tech announcements in the Fall Economic Statement that shouldn’t be overlooked first appeared on BetaKit.