Budget limitations and inexperience can make hiring new employees a difficult decision for small business owners. Happily the Government of Canada as well as the provincial governments have a variety of programs to stimulate hiring through tax credits and outright grants and subsidies. Most popularly there is the Scientific Research and Experimental Development credit, which allows for substantial tax credits for businesses that engage in research and development for businesses of all sizes. For small business that are not not engaged in research and development, there are, however, several other, smaller programs that can both directly contribute to your bottom line and allow for expansion of your business. Three of these are discussed below:
Apprenticeship Job Creation Tax Credit
- The tax credit is available to “eligible” apprentices for up to two years of their apprenticeship contract. There are currently 53 trades listed under the what is referred to as the “red seal” program and include bakers, carpenters, cooks, hairstylist and plumbers.
- The maximum credit is $2,000 per year per eligible apprentice
- The contract must be registered with, and approved by the government
- The credit is claimed on the corporate tax return under investment tax credit section.
- Unused tax credits can be carried back 3 years and carried forward 20 years
The Apprenticeship Job Creation Tax Credit website has further details on eligibility and the application process.
Canada Summer Jobs Program
- As the name implies this is a Government of Canada initiative that encourages employers to hire students.
- Funding is available to small business at 50% of the provincial or territorial hourly rate. Eg. Small Businesses in Quebec’s would be entitled to $4.75 per hour which is half of the minimum wage of $9.50.
- Application period is between February 1st, 2011 and February 28, 2011 and can be done online, mail or fax
- Applications are accepted based on certain criteria including the business contribution to and support of local communities and prioritie eg sports and cultural events, tourism and agriculture. Additionally Service Canada looks for mentoring qualities and employers who intend to hire priority students (students with disabilities, Aboriginal students and students who are members of visible minority groups).
- Eligible students must be current and returning full time students who are between 15 and 30 years old and are legally entitled to work in Canada.
Further details can be found at the Service Canada Summer Jobs 2011 website
Small Business Internship Program (SBIP)
- This program applies to small business who are interested in enhancing their “e-business capability” and actively encourages them to develop a web presence and market themselves online
- Eligible businesses must be for-profit sole proprietorships or corporations and have:
- less than 500 employees,
- been operating for at least one year,
- a website
- Government of Canada will provide a grant of up to 75% of total wages paid, to post secondary students, upto a maximum of $10,000.
- Support is available for up to 12 weeks.
- Grant is available only for time spent on e-business projects.
- Qualification for the grant is based on certain criteria which includes providing the student with relevant work for 12 weeks.
- The program runs from April 1st to March 31st.
- Employers can start applying for the program in April, 2011.
More details can be found at Industry Canada SBIP website
A comprehensive list of both Federal and Provincial programs are available at Canada Business' website: Services for Entrepreneurs. It is also a great resource for entrepreneurs and small business owners and, although perhaps not the most exciting reading, it is dsefinitely worth browsing.
Additional resources for small business owners can be found in our Small Business and Tax FAQ section
- Resources for professional and personal financing
- Provisions from the 2011 Federal budget that benefits small business
Ronika Khanna is a Montreal accountant who helps small businesses achieve their financial goals. To receive regular updates of articles pertaining to small business, accounting, tax and other topics of interest to business owners you can sign up here. You can also follow her on Facebook or Twitter