Intro to the Ontario Funding Roadmap

Let’s kickoff the tour of Ontario Funding Sources (part 1 of 6) with the ‘low hanging fruit’, government tax credits. Most tax credits are only available at the close of the Tax Year, after you have made the eligible expenditures. Setting your business up to maximize its tax credit eligibility takes time and will likely require the help of an experienced accountant. However, it is inexpensive capital, and your business is entitled to it, so capture the credits and use them to grow!

Tax Credits

CRA Listing of Provincial R&D Credits: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/prv-crdts-eng.html

Ontario Specific: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/prv-crdts-eng.html#ntr

Most well-known is SR&ED: http://www.cra-arc.gc.ca/txcrdt/sred-rsde/menu-eng.html

Less well-known but related to SR&ED are OITC: http://www.fin.gov.on.ca/en/credit/oitc/ & ORDTC http://www.fin.gov.on.ca/en/credit/ordtc/

Do not let your accountants miss these eligibilities.

If you are or can partner with an Not-For-Profit (NFP) / Academic Institution checkout OBRITC: http://www.cra-arc.gc.ca/tx/bsnss/tpcs/crprtns/prv/on/bsnssrsrch-eng.html This is a large pool (up to $4m).

If any of your employees are under 30 years of age, dig into the Youth Employment Programs. The Government, both Provincial and Federal, are aggressively deploying money to support youth employment. https://www.ontario.ca/jobs-and-employment/youth-jobs-strategy. The program to attack for startups is the Youth Employment Fund that will provide up to $6800 per team member under 30. http://www.tcu.gov.on.ca/eng/employmentontario/youthfund/. You can also capture $2/hour for interns so please pay them. https://www.ontario.ca/jobs-and-employment/employer-incentives-hiring-students. Co-Op placements can generate a rebate of up to 30%. http://www.fin.gov.on.ca/en/bulletins/ct/4014.html#qlfyg.

When it comes to tax credits, I would always assume there are more. A good accountant who is specialized in innovation companies is highly recommended. My go-to person is Dale Wilson of Collins Barrow http://www.collinsbarrow.com/en/cbn/professionals/toronto-ontario/dale-wilson. At the minimum use a big 4 firm (PWC, Deloitte, KPMG, E&Y). Tax credits are found money; do not risk an audit or issue with the CRA.

Leveraging your SR&ED filing is the best way to augment your team with accounting expertise. Many firms have created programs to work with early stage companies. Taking success fees on SR&ED and other programs is a good way for them to cover their costs and for your company to leverage their expertise on your other financial management issues. Treat these capital sources as ‘found money’ use it to enhance areas you would neglect like accounting. governance, other general admin OR to take more aggressive risks like hiring ahead of cash-flow, launching a paid acquisition campaign, traveling to meet prospects or go to conferences. Do not use this money to underwrite a venture that is not sustainable. There are enough Zombies out there all ready, don’t join the herd.

This is part 1 of 6. Get the whole 6 part series as a PDF by subscribing to the newsletter. @ http://scottjhoward.com

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