Update on federal innovation policies and initiatives

December 19, 2023 - Ottawa, Ontario - Department of Finance Canada and Innovation, Science and Economic Development Canada

Today, the Government of Canada is providing an update on federal support for Canada’s innovation ecosystem, with a focus on improving existing programs that support Canadian businesses.

The government will launch consultations in January 2024 on a cost-neutral modernization of the Scientific Research and Experimental Development (SR&ED) tax incentive program. SR&ED is a cornerstone of federal funding for innovation in Canada and provides firms with the support they need to conduct research and development (R&D) and develop valuable intellectual property. Consultations will focus on how to better target SR&ED to the broader goals of ensuring that support effectively benefits Canada and positions the country as an R&D leader.

Following a recent legislative review of the Business Development Bank of Canada (BDC), the government will also make the report’s recommended improvements to BDC. Delivering on these recommendations would allow BDC to expand its reach across Canada, better complement other business development supports, and continue to provide commercial financing to entrepreneurs and small businesses. As announced in the 2023 Fall Economic Statement, the government is also reviewing the overall role of BDC and Export Development Canada (EDC), including by increasing the risk appetite of the organizations where appropriate to best support Canadian businesses.

In order to ensure the National Research Council Industrial Research Assistance Program (NRC IRAP) can seamlessly provide its essential support to the thousands of small and medium-sized enterprises it works with each year, the transition of NRC IRAP to the Canada Innovation Corporation (CIC) will now take place following the full implementation of the CIC no later than 2026-2027. The government will be seeking advice from leading Canadian investors, including pension funds, about the launch of the CIC. In the interim, NRC IRAP will continue to be delivered by the NRC, and will support a select number of larger-scale R&D projects.