What does Budget 2011 mean for you?

Jim Flaherty might be tightening Ottawa’s pursestrings, but some details of the post-election version of the 2011 federal budget are cause for optimism among Canadian entrepreneurs.

Unveiled in the House of Commons June 6, the budget is one of fiscal restraint. What money is being spent is going towards initiatives to spur job creation and economic growth, many of which hold particular promise for small and mid-sized enterprises.

Here are the seven provisions that could most benefit your business:

1. Support for hiring:

Budget 2011 calls for a temporary hiring credit for small businesses that paid EI premiums of $10,000 or less in 2010. The credit is worth up to $1,000 against a firm’s 2011 increase in EI premiums. In practical terms, this means a firm with $413,000 in payroll will be able to create a new $40,000-per-year job without paying EI on the new position, according to the Canadian Federation of Independent Business (CFIB).

2. ICT investment:

An $80-million, three-year program will allow SMEs to speed up their adoption of information and communications technologies through collaborations with local colleges.

3. Capital purchase help:

Companies in the manufacturing and processing sectors will get some help in buying big-ticket green items. The budget extends by two more years the accelerated capital cost allowance program, which allows companies to write off certain capital expenses related to energy-efficient processing machinery and equipment at a faster rate.

4. Green investment:

Clean-energy firms will be eligible for a jolt of cash: the budget renews funding of almost $100 million over two years for R&D related to energy efficiency. Clean-energy generation equipment will also be eligible for the accelerated capital cost allowance.

5. A leg up for young entrepreneurs:

The Canadian Youth Business Foundation will receive $20 million over two years to support young entrepreneurs through mentorship, learning and startup financing programs.

6. Less red tape:

The budget professes to lessen the regulatory compliance burden faced by small businesses through a $3-million upgrade of the government’s free online BizPaL service and support for the efforts of the Red Tape Reduction Commission. In addition, the budget includes plans for an overhaul of Customs Tariff legislation to reduce the amount of processing done by importers.

7. Tax transparency:

The budget sets out to improve the tax return filing process. For instance, by April 2012, the Canada Revenue Agency will provide written responses electronically to all clients who submit questions through the My Business Account interface. The CRA will also review the penalty structure for late returns.

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