Prime Minister Highlights government investments in small businesses in Canada

Prime Minister Stephen Harper today welcomed the start of Small Business Week in Canada, which runs from October 18 to 24 and includes events across the country to recognize all that small businesses do for the Canadian economic and social fabric.

"Small Business Week provides an opportunity to acknowledge the importance of small and medium-sized businesses" said Prime Minister Harper.  "They are the backbone of our economy and a major source of jobs across the country."

"Our Government will continue to ensure small and medium-sized enterprises have the opportunity to succeed and grow, despite the global economic downturn," said the Prime Minister.  "Canada's Economic Action Plan is delivering timely and targeted new initiatives to help ensure that businesses come out of the recession stronger than ever.  Our economy is already showing signs of recovery and that recovery is being led by entrepreneurs."

The measures included in Canada's Economic Action Plan are tax reductions for small businesses, targeted investments to improve access to financing, increased availability of venture capital, tax credits that encourage the purchase of new equipment and improved access to the Government of Canada's business services.

The Government is working closely with entrepreneurs and business owners to strengthen this foundation and make Canada an innovative and competitive leader on the global stage.

Background Document

Strengthening Access to Financing

The Government has taken significant steps to mitigate the impact of the global credit crunch and ensure access to financing for small businesses by:

• Providing an additional $350 million in capital to both the Export Development Corporation (EDC) and the Business Development Bank of Canada (BDC) so they can provide additional support to Canadian businesses.
• Creating the Business Credit Availability Program (BCAP) to improve access to financing for credit-worthy businesses, enhancing co-operation between private-sector financial institutions and the Government's financial Crown corporations. EDC and BDC are working to provide at least $5 billion in additional direct lending and other types of support.
• Allocating over $1 billion under the Canadian Secured Credit Facility to buy asset-backed securities originated by smaller vehicle and equipment companies under the Small Enterprise Tranche.
• Enhancing EDC's existing Export Guarantee Program to increase the guarantee coverage from 75 to 90 percent for loans up to $500,000, benefiting small and medium-sized enterprises (SMEs).
• Expanding EDC's mandate to allow the Corporation to provide financing and insurance in the domestic market for a temporary period.
• Providing $161 million in capital to BDC so it can expand higher risk lending through a new Working Capital Support program.
• Providing an additional $350 million over three years in funding for BDC's venture capital activities to allow it to make additional direct investments in technology companies and invest in private, independent Canadian venture capital funds. This funding is in addition to the $75 million allocated in Budget 2008 to BDC to support the creation of a late-stage venture capital fund and the $50 million for venture capital activities in Southern Ontario as part of transitional programming for the Federal Economic Development Agency for Southern Ontario.
• Increasing the maximum eligible loan amount a small business can access under the Canada Small Business Financing Program from $250,000 to $350,000, as well as $500,000 for loans made for acquiring real property.
• Providing $10 million to the Canadian Youth Business Foundation to support and mentor young Canadians who are creating new businesses.
• Providing the National Research Council's Industrial Research Assistance Program with an additional $200 million over two years to temporarily expand its initiatives for technology-based SMEs and contribute to an innovation-led economic recovery. This includes $170 million for contributions to firms, and $30 million to help companies hire over 1000 new post-secondary graduates in business and science over the next two years.

Reducing the Tax Burden

Since taking office, the Government has provided tax relief measures to help SMEs invest more earnings in development and expansion, helping to create more jobs.  Canada's Economic Action Plan has raised the amount of business income eligible for the small business tax rate of 11 percent to $500 000 from $400 000 while Employment Insurance premium rates will remain frozen at the 2009 levels.  The Government has also increased the taxable income range for the higher 35 per cent scientific research and experimental development (SR&ED) rate; the enhanced SR&ED rate is now phased out over the $500,000 to $800,000 range.

Business Services

• Renewal of Canada Business Network (CBN) funding for $30 million over two years ensures continuation of this valuable resource and enhanced service, including the new national CBN website.  The CBN consolidates business resources into one convenient service, providing a single point of access to relevant information from multi-levels of government and not-for-profit organizations to aid in the start-up and growth of small businesses.

• BizPaL is a service which offers entrepreneurs and businesses simplified access to permit and license information from multiple levels of government.  To date, 11 provinces and territories are participating in BizPaL, along with more than 330 municipalities. BizPaL is convenient and efficient and helps reduce the paperwork burden faced by Canadian SMEs.
• The Canada Revenue Agency now offers two useful services - My Business Account and My Payment - to help Canadian businesses by providing self-serve access to information and an Interac-based electronic payment alternative for business taxpayers and representatives seven days a week.  Business owners can do such things as transmit corporate income tax and information returns, view previously issued correspondence items, view certain account balances, view transactions and much more from their homes or offices.  These new services are yet another achievement aimed at reducing the paperwork and compliance burdens for Canadian businesses.
• Public Works and Government Services Canada just recently launched a new guide entitled, Your Guide to Doing Business with the Government of Canada.  This is another tool to help SMEs access federal business opportunities and navigate the procurement system.

Expanding Markets for SMEs

• SMEs encourage expansion and prosperity of the Canadian economy and have helped secure a more stable position for Canada in the economic recession.  These enterprises extend Canadian international trade, accounting for 20 per cent of the total value of Canada's exports.  Canada's Trade Commissioner Service helps small businesses find global markets for their products and services.  Trade commissioners located in more than 150 cities worldwide and in 18 regional offices across Canada help thousands of Canadian companies­ - both large and small - compete internationally.  The Canadian Trade Commissioner Service assists companies through four key services: preparing for international markets, assessing market potential, finding qualified contacts and resolving problems.