Ontario Economic Update Suggests Replacement of R&D Tax Credits with Incentive to Reward Incremental R&D

The recent Ontario Economic Update included proposed measures intended to promote capital investment including replacing existing R&D tax credits (SR&ED) with an incentive that would reward incremental  R&D spending. This new credit would redirect support to incremental R&D expenditure growth,  to encourage businesses to increase R&D and expand research operations in Ontario.

Ontario also proposed “pay or play” tax incentives, such as a special corporate tax
that could be eliminated or reduced through investments in new equipment or other eligible  investment expenses, and a payroll tax that could be eliminated or reduced by employer investments in employee training or training programs.

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