Growing Small Businesses

Small- and medium-sized businesses are an integral engine of Canada’s economy, and they employ about 64 per cent of Canadian workers. Entrepreneurs, local small business, start-ups, growing medium-sized businesses—everywhere in Canada, there are people with good ideas, ready to grow their businesses and create good jobs.

Small- and medium-sized businesses are an integral engine of Canada’s economy, and they employ about 64 per cent of Canadian workers. Entrepreneurs, local small business, start-ups, growing medium-sized businesses—everywhere in Canada, there are people with good ideas, ready to grow their businesses and create good jobs. The government is ensuring Canada’s investment climate sets businesses up for success.

For economic growth to reach the pace that is needed, existing businesses need support to stay competitive and scale-up. The government is taking action to help businesses scale-up their technological innovations, and implement productivity-raising technology across the economy. Budget 2024 invests to make it easier for new businesses to start-up and for existing businesses to grow by cutting red tape and providing the tools businesses need to scale-up.

Key Measures in Budget 2024

• The New Canada Carbon Rebate for Small Businesses to urgently return proceeds from the price on pollution from 2019-20 through 2023-24 to an estimated 600,000 businesses in provinces where the federal backstop applies, with 499 or fewer employees through a new refundable tax credit. This would deliver over $2.5 billion directly to these small- and medium-sized businesses.
• Empowering Young Entrepreneurs with an investment of $60 million over five years for Futurpreneur Canada, which is a national not-for-profit organization that provides young entrepreneurs with access to financing, mentorship, and other business supports to help them launch and grow their business. By 2029, Futurpreneur Canada estimates this investment will enable an estimated 6,250 additional businesses owned by young Canadians to launch and scale-up their businesses.
• Lifetime Capital Gains Exemption Increase from the current amount of $1,016,836 in capital gains tax-free on the sale of small business shares and farming and fishing property to $1.25 million, effective June 25, 2024. The Lifetime Capital Gains Exemption will continue to be indexed to inflation thereafter. In 2025, Canadians with eligible capital gains of below $2.25 million will be better off under these changes.
• A new Canadian Entrepreneurs’ Incentive to reduce the inclusion rate to 33.3 per cent on a lifetime maximum of $2 million in eligible capital gains. When this incentive is fully rolled out, entrepreneurs will have a combined exemption of at least $3.25 million when selling all or part of a business.
• Investing in Canadian Start-ups with $200 million over two years, starting in 2026-27, on a cash basis, to increase access to venture capital for equity-deserving entrepreneurs, and to invest in underserved communities and outside key metropolitan hubs. 
• Boosting Government Procurement from Small- and Medium-Sized Businesses, by announcing the government’s intention to propose legislated procurement targets for small- and medium-sized businesses and innovative firms.
• Supporting Indigenous-owned Businesses by providing $350 million over five years to Indigenous Financial Institutions, including $30 million for Métis Capital Corporations.