Articles

2024 Fall Economic Statement Explainer for Food Innovators

By Community Manager posted 12-17-2024 14:11

  

What Happened: This week, the Liberal government tabled its 2024 Fall Economic Statement amidst significant political turmoil, marked by Finance Minister Chrystia Freeland’s sudden resignation. 

Why It Matters: The statement includes over $20 billion in new spending and a renewed focus on supporting business investment and innovation, but the political uncertainty raises questions about the stability and implementation of these measures.  However, if implemented as planned, the statement brings critical changes for Canada’s innovation ecosystem. 

What Food Innovators Need to Know

Capital Expenditure Eligibility Returns to SR&ED:  

  • The long-awaited restoration of capital expenditure eligibility under the Scientific Research and Experimental Development (SR&ED) tax incentive program allows businesses to claim machinery and lab equipment — a significant win for food innovators investing in R&D and scaling production. 

  • The government is also increasing the annual expenditure limit from $3 million to $4.5 million. SR&ED credits are now available to companies with taxable capital under $15 million (up from $10 million) and can continue receiving them until a new phase-out threshold of $75 million (up from $50 million). The increases should help incentivize work into long-term, research-intensive innovation areas like cellular agriculture.  

New Venture Capital Funding 

  • This round includes more attractive terms to draw in private capital from pension funds and institutional investors, a critical opportunity for foodtech startups and scale-ups to secure growth funding. 

Building Access to Capital for Mid-Cap Companies 

  • Up to $1 billion will be invested to support Canadian mid-cap companies in scaling for long-term growth.  

  • The government’s proposed concessional structure, matching 25% of net new private investments, will help unlock additional private capital and strengthen Canada’s innovation-driven sectors, including agrifood. 

  • Eliminating Regulatory Barriers to Innovation 

  • The government is launching a Red Tape Reduction Office with $27.8 million over five years to streamline outdated and burdensome regulations, reducing costs for businesses and accelerating innovation. 

  • The office will modernize regulations through targeted reviews and introduce novel tools like regulatory sandboxes to support emerging sectors and industry advancements. 

More Financing Options and Lower Costs for SMEs: 

  • The BDC Community Banking Initiative will improve access to financing for up to 100,000 small businesses, focusing on rural, young, and unconventional entrepreneurs. 

  • Financial Crown corporations, including BDC, EDC, and FCC, will take on greater risk appetite to provide targeted support for SMEs, exporters, and farmers, aligning capital with growth opportunities. 

 

The Bottom Line for CFIN Members 

Despite the political uncertainty surrounding its release, the 2024 Fall Economic Statement offers significant opportunities for Canadian food innovators and small businesses.  

With restored SR&ED eligibility for capital expenditures, new venture capital funding, mid-cap growth investments, streamlined regulations, and targeted financing support for SMEs, the proposed changes would deliver much-needed tools to scale operations, drive innovation, and fuel the growth of Canada’s food sector.