Ottawa – 22 March 2016 – Today the Liberal government of Canada tabled the 2016 federal budget, their first budget since being elected to office last October.

This budget is focused on implementing the major initiatives the government promised as part of their election platform, including support for the environment, the growth of the middle class, and economic stimulus through infrastructure investments. Overall, the budget introduces a deficit of $29.4 billion in 2016-17.
 
Measures impacting the aerospace, space and defence sectors are as follows:
 
SPACE:

• $379 million over eight years for the Canadian Space Agency to extend Canada’s participation in the International Space Station to 2024.
• Reaffirmed continued Canadian participation in other important international space collaborations, including the European Space Agency’s Advanced Research in Telecommunications Systems program, which received for which $30 million over four years, starting in 2016–17, was provided in Budget 2015.

 
INNOVATION:

• Development in 2016 of a cross-government Innovation Agenda which will redesign and redefine the way government supports innovation and growth.
• $800 million over four years, starting in 2017–18, to support innovation networks and clusters. More details will be provided in the coming months as part of the Government’s upcoming
Innovation Agenda.
• An additional $50 million for the Industrial Research Assistance Program (IRAP) to increase the number of companies served by the program nationwide.
• Additional $30 million per year, starting in 2016-17, on an ongoing basis to Natural Sciences and Engineering Research Council (NSERC)

 
DEFENCE:

• Development of a new defence strategy that will include improved processes to ensure more accurate costing for major defence procurements and to provide Canadians with regular updates on project costs and timelines.
• Reallocation of $3.716 billion for large-scale capital defence-related projects from the 2015-16 to 2020-21 period to future years, to align with the timing of major equipment acquisitions.

 
SMALL BUSINESS:

• Small business income tax rate of 10.5 percent on the first $500,000 of active business income. The Budget proposes that further reductions in the tax rate be deferred.
• Creation of a new High Impact Firm Initiative to help high-impact firms scale up and further their global competitiveness. The initiative will provide firms with access to coordinated services tailored to their needs at crucial transition points from key organizations including ISED, BDC, EDC, NRC’S IRAP, the Trade Commissioner Service and the Regional Development Agencies. The initiative will target 1000 firms in the first few years and expand to more firms thereafter.

Source: AIAC.