2021 Federal Pre-Budget Submission

Recommendations

Recommendation 1: That the government de-risk and encourage manufacturers to digitize, automate, adopt advanced technology, and help drive productivity growth. Specifically: Ci) Introduce a 10 per cent refundable investment tax credit on the purchase of new machinery, equipment and technologies, including software; (ii) Recapitalize existing investment support programs, such as the federal Strategic Innovation Fund (SI F), and streamline and speed their application processes to provide business certainty; (iii) Relaunch investment support grant programs for smaller firms, modelled after the successful CME SMART programs that operated after the previous recession.

Recommendation 2: That the government support R&D spending and scale-up of companies by improving and enhancing the SR&ED program. Specifically: Ci) Expand the range of SR&ED­ eligible activities; (ii) Introduce a refundable component to the SR&ED credit for all claimants; (iii) Return the SR&ED tax credit rate to 20 per cent; (iv) Support scale-up by reducing the SR&ED grind down for growing companies; (v) Ensure that the Canada Emergency Wage Subsidy (CEWS) does not impact eligibility for SR&ED credits.

Recommendation 3: That the government implement a patent box regime to reward commercialization and production of goods and advanced technologies in Canada, thus eliminating a key competitive disadvantage between us and a growing number of our international peers.

Recommendation 4: That the government provide employer incentives to upskill, hire and retain workers, thus creatingjobs for unemployed Canadians and helping to address labour and skills shortages in manufacturing. Specifically: Ci) Introduce a 50 per cent worker training tax credit that offsets company costs for new hires during their first five years of employment; (ii) Renew and
expand funding for CME’s Women in Manufacturing initiative to recoup employment losses suffered by women in the sector; (iii) Offer tax credits to companies to create child care spaces for their workers.

Recommendation 5: That the government help the manufacturing sector adapt to and advance Canada’s climate change strategy. Specifically: Ci) Introduce a Green Innovation Fund that encourages the development and production of new, leading-edge emissions reduction and clean technologies; (ii) Introduce a green investment tax credit that encourages Canadian manufacturers to invest in emissions reduction and clean technologies; (iii) Create and fund a program that supports SM Es in their efforts to lower carbon emissions, including activities that lower the barriers to energy efficiency investments.

Recommendation 6: That the government increase Canadian value-added exports. Specifically: Ci) Introduce an export tax credit to offset export market development costs; (ii) Fund the creation of an Exporter Concierge Service that enables trade associations to develop programs that link their members to government export agencies and services; (iii) Create a “Trade Barrier Hotline” for exporters to call and report trade barriers and to offer exporters assistance in overcoming trade barriers; (iv) Invest in infrastructure that facilitates trade and industrial development.

Recommendation 7: That the government continue actions to fight COVI D-19 and prepare for future pandemics. Specifically: (i) Keep supporting the economy with emergency measures until the economy improves; (ii) Support Canadian manufacturers of personal protective equipment (PPE) and other critical goods to build domestic capacity to keep Canadians safe and create jobs.