The Saskatchewan government has introduced legislation to create a new Small and Medium Enterprise (SME) Tax Credit.
Trade and Export Development Minister Warren Kaeding said the initiative will help strengthen the provincial economy by encouraging local investment.
"Small and medium-sized businesses are foundational for the strength of our Provincial economy, during a time when increasing local investment is more important than ever," Kaeding said. "With this new incentive, more small and medium-size businesses will be able to build equity, allowing them to grow, which leads to more jobs for our growing workforce. This is just one of the many ways that our budget delivers to the people of the province."
The tax credit program is a three-year pilot project modeled after the province's Saskatchewan Technology Startup Incentive (STSI). It targets businesses in the food and beverage manufacturing sector, as well as the machinery and transportation equipment industries.
The program will provide a 45 per cent non-refundable tax credit for individuals or corporations investing in the equity of eligible Saskatchewan SMEs. It will have an annual cap of $7 million in total non-refundable tax credits, awarded on a first-come, first-served basis. To qualify, a business must be based in Saskatchewan, employ between five and 49 workers, and have at least half of its workforce residing in the province.
The number of small businesses in Saskatchewan has increased by 4.9 per cent since 2014.
Private capital investment in the province rose by 17.3 per cent last year to $14.7 billion, the highest growth rate among provinces. Investment is projected to reach $16.2 billion in 2025, a 10.1 per cent increase over 2024, the second highest anticipated growth among provinces.
The SME Tax Credit pilot program will run from July 1, 2025, to June 30, 2028, with applications opening in late 2025.