The 2024 Ontario Budget was released last week, with more than $100 million earmarked for the Invest Ontario Fund (IOF) and a suite of R&D initiatives to help turn around sluggish growth across Canada.
Inflation and high interest rates have played a major role in this slowdown, and are among the reasons Ontario has decided to delay its previous plans to balance the budget until 2026.
This follows Quebec—facing its largest deficit ever—also delaying its plan to balance the budget until at least 2028. As part of this, the province will overhaul the Electronic Business Development Tax Credit (CDAE) and the Multimedia Tax Credit (CTMM), shifting the refundable and non-refundable portions to a 20:10 split by 2028—allowing the province to recover $365 million in previously claimed tax credits.
While Ontario’s 2024 budget focuses on infrastructure and healthcare, it’s also maintaining the annual $100 million investment in the IOF that began in 2023. Launched in 2020, the IOF is designed to attract foreign investment in Ontario’s manufacturing, life sciences, and tech sectors, and has reached a $600 million valuation so far.
Beyond this headline figure, however, many of the other innovation funding measures in Budget 2024 seem more like efforts to maintain the status quo than bold new investments.
For example, Budget 2024 sets aside another $12 million to launch a Health Technology Accelerator Fund, helping healthcare providers access promising new healthtech solutions from Ontario innovators. The plan also adds $1 million per year for Ontario’s Regional Innovation Centres (RICs), and allocates $18 million over three years to keep Ontario’s Advanced Research Computing systems running smoothly.
Is maintaining the status quo enough to fuel Ontario’s growth?
Budget 2024 was notably light on new initiatives, as CCI president Benjamin Bergen pointed out.
“Innovators know the Ontario government is juggling many priorities and challenges, so we didn’t expect the 2024 budget to focus on innovation,” Bergen said in a statement.
Of course, Ontario didn’t make changes as sweeping as Quebec did when it restructured long-standing tax programs that many local tech companies depend on.
But without new support from provincial governments—combined with that previously mentioned inflation (high interest rates and other economic headwinds)—innovative businesses will have to rely even more on existing federal innovation funding programs to drive growth in today’s market.
Promises for angel investors and ongoing support
While other areas saw little change, Budget 2024 did highlight steps by the Minister of Finance to work with the Ontario Securities Commission (OSC) on rules to support angel investor groups. This comes as many Canadian angel funds face reduced federal support and are looking to the provinces for help. The budget states:
“…To encourage early-stage financing, the OSC is developing rules to support angel investor groups and expand capital sources by adopting a self-certified prospectus exemption. To help smaller issuers raise capital, the OSC is also broadening investment dealer participation in prospectus offerings.”
While angel investors are crucial for helping early-stage startups get off the ground, this type of funding is really just a starting point—not a long-term solution.
As Canadian companies mature and tap into Ontario’s accelerator programs and innovation funds to drive growth, they’ll need to keep leveraging every available government resource to finance their expansion.
This includes non-dilutive funding, from grants like IRAP to the flagship Scientific Research & Experimental Development tax credit. But accessing these resources shouldn’t drain your team’s time and energy.
Boast combines deep industry expertise with advanced technology to deliver more thorough, accurate, and valuable R&D tax credit and non-dilutive funding claims. We handle the heavy lifting, so your R&D leaders can focus on innovation and growth—Boast clients save up to 60 hours on average when claiming SR&ED with us.
Speak with an expert today to find out how you can streamline access to the funding you need to grow.
