LifeSciences BC > News > Industry News > 2016 > 2016 Federal Budget – INVESTMENT IN INNOVATION

Print Friendly


March 22, 2016 – OTTAWA

The federal government is charting a new effort to build a sustainable knowledge-based economy in Canada. The “Innovation Society” strategy not fully completed as of March 22, 2016 – Budget Day, showed the early initiatives that will over time, position Canada as a leading global life science cluster.

Highlights – Budget 2016 – 17
The budget earmarked $2B for universities and research grants and promised to spend $800M over four years beginning in 2017 to support Innovation “Clusters and Networks” in Canada; Genome Canada received $237M.

For British Columbia the largest investment went to a renewal of the research pipeline at The Centre for Drug Research & Development – $32 M over two years.

The Government has pledged to define clear outcomes, including objectives and metrics to measure progress when it comes to launching its full innovation plan later this year.

As a relief to many the budget left the employee stock option incentives alone and will therefore, continue to be used to incentivize employee packages.

To review further details of the Innovation Investment Strategy please follow this link

Research and Innovation Investments

Post-Secondary Institutions Strategic Investment Fund
• $2 billion over three years, starting in 2016–17, for a new Post-Secondary Institutions Strategic Investment Fund, a time-limited initiative that will support up to 50 per cent of the eligible costs of infrastructure projects at post-secondary institutions and affiliated research and commercialization organizations, in collaboration with provinces and territories.

Investment in Discovery Research
• Budget 2016 will provide an additional $95 million per year on an ongoing basis to the granting councils— the highest amount of new annual funding for discovery research in more than a decade.

Commercializing Canada’s World-Class Health Discoveries
• Budget 2016 proposes to provide up to $32 million over two years, starting in 2017–18, to fuel the growth of the Centre’s promising pipeline and contribute to fully reaping the benefits of Canada’s significant investments in health research.

Positioning Canada to Attract Talent and Conduct World-Class Research
• Budget 2016 proposes to provide $14 million over two years, starting in 2016–17, to the Mitacs Globalink program. This funding will support 825 internships and fellowships annually, helping Canadian universities to attract top students from around the world and enabling Canadian students to take advantage of training opportunities abroad.

Supporting Leadership in Genomics
• To continue to support leading genomics researchers and promising scientific breakthroughs, Budget 2016 will provide $237.2 million to support Genome Canada to the end of 2019–20.

Stem Cell Research through the Stem Cell Network
• Budget 2016 proposes to provide up to $12 million over two years, starting in 2016–17, to support the Network’s research, training and outreach activities.

Brain Research through the Brain Canada Foundation
• Budget 2016 proposes to provide up to $20 million over three years, starting in 2016–17, for the Brain Canada Foundation’s Canada Brain Research Fund, which supports competitively awarded, collaborative, multidisciplinary brain health and brain disorder research projects. Federal funding for this initiative will be matched by resources raised from other non-government partners of the Brain Canada Foundation.

Innovation Networks and Clusters
• Budget 2016 will make available up to $800 million over four years, starting in 2017–18, to support innovation networks and clusters. More details will be provided in the coming months as part of the Government’s upcoming Innovation Agenda.

Linking Canadian Technology Companies to Global Markets and Expertise
• Budget 2016 proposes to provide $4 million over two years, starting in 2016–17, to renew the Canadian Technology Accelerator Initiative. This program supports Canadian information and communications technology, life sciences and clean technology firms by providing mentorship, introductions to potential clients/partners, and desk space in business accelerators abroad. Managed by the Canadian Trade Commissioner Service, the program is available in nine locations in the United States, United Kingdom, France and India.

Small Business Tax Changes
• The small business deduction rate will remain at 10.5%. (The rate was to decrease to 9% in 2019.) The gross-up rate on non-eligible dividends will be maintained at 17% and the dividend tax credit rate will be 21/29 of the gross-up amount.

Active vs. investment business rules

• The 2015 budget announced a review of the circumstances in which income from a business, the principal purpose of which is to earn income from property should qualify as active business income and therefore be eligible for the small business deduction. No modifications are proposed to these rules for 2016 – 17.

Sales and other Tax Measures
• The government has indicated that it will not proceed with Budget 2015 measures that would grant an exemption from capital gains taxation for certain dispositions of real estate or private corporation shares where cash proceeds from the disposition are donated to a registered charity or other qualified beneficiary within 30 days.