Programs and investments to help specific regions and specific industries that have been particularly hard hit by tough economic times are also part of the Canadian federal budget 2009. However, for Canadian small businesses, it's the government's proposals to invest in housing and infrastructure, the indirect benefits to small business, that will be the most help.
Budget 2009 Regional Business Support
Three particular regions of the country are targeted for development support; Southern Ontario, Eastern Ontario and the North.
In response to Ontario's economic challenges, Budget 2009 provides more than $1 billion over five years for a new Southern Ontario development agency.
Budget 2009 also provides $20 million over two years for the Eastern Ontario Development program to support business and community development in rural areas of Eastern Ontario. This program will be administered by the Southern Ontario development agency.
Budget 2009 provides $50 million over five years to establish of a new regional economic development agency for the North.
Budget 2009 Support for Specific Industries
For Farming
The 2009 Canadian Federal Budget proposes several measures to help farmers, including the implementation of a "five-year, $500 million agricultural flexibility program that will facilitate the implementation of new initiatives" and an investment of $50 million over the next three years to strengthen slaughterhouse capacity in various regions of the country, to support the livestock sector.
The most interesting measure, I think, is this one:
"Budget 2009 also announces proposed amendments to the Farm Improvement and Marketing Cooperatives Loans Act to help make credit available to new farmers, support inter-generational farm transfers, and modify eligibility criteria for agricultural cooperatives. Currently, credit availability under the Act is limited to existing farmers and product marketing cooperatives fully owned by farmers. The proposed amendments will support the renewal of the sector workforce and enable cooperatives to better seize market opportunities."
Forestry, shipbuilding, tourism, the automotive industry and the space industry are also singled out as key industries. Arts and culture, newspapers and magazines, television, new media and sport are all supported in the new budget.
Budget 2009 Indirect Small Business Benefits
All of the direct measures to aid Canadian small businesses that I've described previously in this article are good things. However, none of them will do as much to get the small business sector of the economy humming again as the federal government's proposed investments in housing and infrastructure.
Overall, Budget 2009 proposes to provide up to $7.8 billion in tax relief and funding to help stimulate the housing sector and improve housing across Canada.
Two programs, one a tax credit, the other an outright grant, will be a huge boon to the hard-hit renovation and construction industries; the Home Renovation Tax Credit and the ecoENERGY Retrofit program.
The Home Renovation Tax Credit
The temporary Home Renovation Tax Credit provides up to $1,350 in tax relief for eligible home renovations. Here are the details from Budget 2009:
"The proposed HRTC will provide a temporary 15-per-cent income tax credit on eligible home renovation expenditures for work performed, or goods acquired, after January 27, 2009 and before February 1, 2010, pursuant to agreements entered into after January 27, 2009. The credit may be claimed for the 2009 taxation year on the portion of eligible expenditures exceeding $1,000, but not more than $10,000, and will provide up to $1,350 in tax relief. The HRTC will be family-based. For the purpose of the credit, a family will generally be considered to consist of an individual, and where applicable, the individual's spouse or common-law partner. Family members will be able to share the credit."
The ecoENERGY Retrofit Program
The Canadian federal budget 2009 also proposes providing an additional $300 million over two years to the ecoENERGY Retrofit program to support an estimated 200,000 additional home retrofits.
"The ecoENERGY Retrofit program provides home and property owners with grants of up to $5,000 to offset the costs of making energy-efficiency improvements. Grants apply to a variety of measures that reduce energy consumption from increasing insulation to upgrading a furnace."
Loans for Municipal Infrastructure
Additionally, the government pledges to "help municipalities build stronger communities" by making available up to $2 billion over two years in direct, low-cost loans to municipalities to finance improvements to housing related infrastructure, such as sewers, water lines, and neighbourhood regeneration projects. Municipalities will also have access to significant new funding available under major new provincial, territorial and municipal infrastructure initiatives.
These three programs, coupled with the government's proposed investments in social housing, should be a spur to the beleaguered construction and related industries.
Budget 2009 for Canadian Small Businesses Summary
The Canadian federal budget 2009 is a masterful attempt to give something to everyone - including Canadian small businesses. And almost all Canadian small businesses will be able to benefit directly from the budget to some degree, even if it's only being able to fully write-off a new computer purchase.
However, it's what I call the indirect benefits to small businesses that will benefit them the most, the government programs that are planned to encourage work on renovations, housing and infrastructure.
