News Summary

Canadian startups may be able to find additional funds during the holiday season due to a legislative amendment in Bill C-69. The bill, which focuses on clean energy investment tax credits, redefines certain government-issued loans as ‘excluded loans,’ exempting them from being treated as government assistance. This amendment follows a 2021 Tax Court of Canada decision that required such loans to be considered as government assistance, affecting their compatibility with programs like the Scientific Research and Experimental Development (SR&ED) incentives. The new definition applies to loans issued by a government entity to Canadian residents or partnerships for business income purposes, provided they are not forgivable and have bona fide repayment arrangements. The amendment is retroactive to 2020, allowing businesses to amend past tax filings and potentially reclaim significant funds. This change is particularly relevant for tech companies navigating tight equity markets.