Our world is in crisis. From climate change and war to food poverty and gender equality, we are faced with major challenges. We need innovation, research, and development to solve problems. We need entrepreneurs.
Funding has long been a leading barrier to entrepreneurship and innovation. Over the past decade, we saw valuations soar and interest rates drop, making venture capital and debt attractive funding options. This trend has inverted, as we weather the current economic downturn. Inflation continues to drive interest rate hikes, and capital is becoming increasingly expensive to access. We’ve seen the venture world react by slowing investments and level-setting valuations, leading entrepreneurs to look for alternative capital solutions.
Enter government tax credits, grants, and incentives. Brianna Blaney, CEO and Co-Founder of grant funding tech company Pocketed, says, “There are billions of dollars in government tax credits, grants, and business incentives available every year to fund private-sector innovation and growth. Every Canadian should be exploring government money as part of their funding strategy. Especially now, as other capital becomes more costly and competitive.”
Through a new collaboration, EY Canada and Pocketed are working to eliminate funding as a barrier for entrepreneurs. EY Canada’s industry-leading expertise and Pocketed’s cutting edge fintech solutions will help entrepreneurs access Scientific Research and Experimental Development (SR&ED) tax credits, grants, and incentives.
All G7 countries offer a research and development tax incentive, and Canada’s SR&ED program is one of the most generous, allocating an average of $3 billion to tens of thousands of companies every year. Because it’s paid out as a refund, not a tax credit, SR&ED puts actual dollars back in the pockets of Canadian entrepreneurs.
SR&ED encourages entrepreneurs to undertake projects with an inherent element of risk, driving innovation and new value creation. Technology and innovation underpin global competitiveness, and both are critical in our efforts to solve the shared challenges of gender and education inequality, food and water scarcity, and climate and health crises.
“Canadian entrepreneurs are moving the needle on what’s possible every single day. Supporting these innovative builders as they navigate the funding and incentives ecosystem is one way we can help,” says Dharmesh Gandhi, EY Canada’s Private National Quantitative Services Leader. “We’re excited to work closely with Pocketed to simplify and optimize our smaller Canadian companies’ innovation tax incentive applications, including SR&ED, and ensure they’re set up to successfully attain their growth ambitions. Their success is our success.” Brianna Blaney, Pocketed’s CEO & Co-Founder adds,
“Government money has played a critical role in our ability to build Pocketed. It has allowed us to take risks with innovation, create jobs for Pocketed and for our 8,500+ customers, and grow our business. We’re excited to be working with EY Canada to help small businesses grow and weather the storm of this economic downturn.”
Grants and tax credits can support a range of business activities, from hiring and training, to offsetting capital expenses and implementing digital solutions. Research and development funding programs are among the most generous, and this investment fuels the trailblazing needed tackle our most complex challenges. Together, EY Canada and Pocketed are supporting innovative businesses in utilizing tax credits like SR&ED and others, driving Canadian problem solving when we need it most.