Saskatchewan's Bill 82, which includes a measure to enhance the Saskatchewan Value-added Agriculture Incentive, received first reading on April 11, 2022. In addition, Saskatchewan also filed regulations on March 31, 2022 to increase the province's annual cap to the Saskatchewan Technology Start-up Incentive, effective April 1, 2022. These changes were announced in Saskatchewan's 2022 budget which was delivered on March 23, 2022.
The changes in Bill 82 are considered substantively enacted for IFRS and Accounting Standards for Private Enterprise (ASPE) purposes on April 11, 2022, the date the bill received first reading (as Saskatchewan has a majority government). These measures will be considered enacted for U.S. GAAP purposes on the date the related bill receives Royal Assent.
Background
Saskatchewan announced in its budget that it is enhancing the tax credit rate for the Saskatchewan Value-added Agriculture Incentive to up to 40% (from 15%), depending on the level of investment. This credit applies to capital expenditures valued at $10 million or more for newly constructed or expanded value-added agriculture facilities in Saskatchewan. Qualifying projects may include canola crush facilities, pea protein processors, oat milling operations, malt producing operations and cannabis oil facilities. Specifically, the budget enhances the tax credit rate for the incentive at the following rates:
- 15% on the portion of a project up to $400 million
- 30% on the portion of a project between $400 million to $600 million
- 40% on the portion of a project over $600 million.
The enhanced tax credit rate is retroactive to the origin of the program in 2018, and the maximum credit available for a single qualifying project is $250 million.
Saskatchewan also increased the annual cap of the maximum value of the Saskatchewan Technology Start-up Incentive tax credit to $3.5 million per year (from $2.5 million), effective April 1, 2022. This program offers a non-refundable 45% tax credit to individual, corporate or venture capital corporation investments in eligible start-up businesses that are developing new technologies, or applying existing technologies in a new way, to create qualifying new proprietary products, services or processes. In its 2021 budget, the province extended the Saskatchewan Technology Start-up Incentive through to March 31, 2026.
For more information, contact your KPMG adviser.
Information is current to April 25, 2022. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500
