Table of Contents
As Alberta-based businesses continue to discern rapidly shifting economic and regulatory terrain, the federal Budget 2025 brings both opportunities and imperatives for strategic action. At Faber LLP we believe that for our Western Canadian clients the window to act is now… and those who prepare will distinguish themselves.
1. Innovation, SR&ED and your tax-strategy blueprint
One of the largest shifts in the federal budget is the enhanced support for research and development through the Scientific Research and Experimental Development (SR&ED) program.
The budget proposes to increase the expenditure limit on which the enhanced credit can be earned, from $4.5 million to $6.0 million for taxation years beginning on or after December 16 2024. (Budget.Canada.Ca)
In plain terms: if your corporation is investing in R&D, whether in clean energy, digital transformation, resource-technology, or advanced manufacturing, there is now greater headroom for generous tax credits.
- What this means for our clients
- Review your 2025 fiscal year R&D budget. With the higher ceiling, you may accelerate projects into this year.
- Ensure your claims are well documented: the budget also signals administrative streamlining of the SR&ED process (pre-claim approvals, AI for low-risk claims) which opens an opportunity to secure certainty ahead of time.
- For advisory: We recommend Faber LLP assist in designing an R&D project map, linking expenditures to business strategy, so you optimise the enhanced credit while aligning with your long-term innovation roadmap.
2. Capital investment and accelerated write-offs: prepare the corporate reorganisation lens
Budget 2025 introduces a “Productivity Super‐Deduction” suite of measures: enhanced immediate write-offs for capital investment (manufacturing/processing buildings, capital assets) to boost Canadian competitiveness. (Thelogic.co)
For Western Canadian businesses, particularly in resource-adjacent manufacturing or processing, or in export-oriented sectors, this means:
- Consider bringing forward major capital investments (plant expansions, processing facilities, equipment) to capture first-year deductions and reduce taxable income.
- In the case of corporate reorganisations or M&A activity: structure the acquisition or investment side to benefit from the accelerated deduction regime.
Faber LLP’s advisory practice can assist in modelling the tax impact across purchase price, integration, depreciation profiles and buyer/seller tax burdens.
- For cross‐border operations: if you have US-affiliated entities, ensure the global tax structure aligns with the accelerated write-off rules in Canada.
3. Business advisory & management consulting: aligning strategy with export-diversification support
Budget 2025 lays a lot of stress on trade diversification and resilience of supply-chains. The federal document pledges billions in resources toward trade-diversification corridors, export readiness initiatives, and SMEs aiming to identify markets overseas.
For firms whose business models may be tightly linked to the US market or to traditional resource-exports, this signals an advisory imperative:
- Use Faber LLP’s business management consulting service to perform a “trade-shock readiness” review: identify dependence on single markets, supply-chain choke-points, and export barriers.
- Align corporate tax planning, reorganisations, and M&A strategy with an export-oriented mindset. If you acquire or merge with a complement abroad, the export-readiness support in the budget may make the strategic case stronger.
- For advisory clients: ensure your accounting, audit and review services are tuned to monitor KPIs associated with export diversification, international risk, and supply-chain resilience.
4. Estate & trust tax, US personal income tax services -- border considerations
In a world of global mobility, cross-border tax and estate planning continue to be foundational. While the budget does not overhaul US-Canada personal tax treaties, the strategic environment shifts: improved R&D incentives, capital investment allowances, and trade supports change the calculus for cross-border individual and corporate owners.
- Our advice to clients
- For shareholders of active businesses in Alberta (especially those with US ties): review your estate and trust structures to account for anticipated growth through R&D/investment incentives, and ensure the estate freeze or trust structuring is optimised for surplus accumulation periods.
- For US-resident individuals with Canadian business interests: we recommend synchronising your US personal income tax services with the Canadian investment-acceleration regime so you can anticipate timing of capital deployment and corresponding personal tax effects.
5. Accounting/audit/review and compliance readiness
The budget’s changes to SR&ED administration (pre-claim process, faster turnaround) and capital-deduction regimes mean that proper documentation, audit trails, and forward-looking internal controls are more critical than ever.
- Key steps
- Strengthen your internal project documentation systems: ensure your finance team captures eligible R&D expenditures, tracks project phases, and links to strategic objectives.
- When undergoing audits or reviews, be ready for CRA (Canada Revenue Agency) scrutiny on accelerated write-offs, ensure your capital-asset use is clearly manufacturing/processing-related if you seek the immediate expensing benefit.
- For accounting service clients: Faber LLP’s review engagement practice can pre-emptively identify compliance gaps, thereby reducing risk of reassessments and penalties.
6. Corporate reorganisation and M&A: opportunity in timing
With the budget’s incentives favouring immediate investment and innovation, timing of major corporate actions (mergers, spin-outs, reorganisations) takes on added significance.
- For example
- If a business plans to spin out a tech-division to capture SR&ED credits exclusively, doing so ahead of December 16 2024-tax-years (for the new ceiling) may yield higher value.
- In an M&A context, buying a business with strong R&D capability may become more attractive: the enhanced SR&ED and write-off regimes can accelerate return on investment, thereby improving valuations.
- Estate tax and trust planning tie into exit strategies: if shareholders anticipate capital gain events, aligning those events with the new tax incentives improves net after-tax value.
7. Tax-planning strategy: what we need to start doing now
As your trusted business-tax advisors, Faber LLP recommends the following action plan:
- Conduct a “Budget 2025 readiness” workshop: map your business, tax, and investment strategy against the new federal incentives and Alberta’s fiscal context (e.g., there are no changes to Alberta’s corporate tax rate or small-business limit for 2025-26). (EY)
- Update your corporate tax-planning calendar: include deadlines for capital assets deployment, R&D project initiation, claim filing windows and board approvals.
- Review your cross-border tax exposure and structure: ensure US-affiliated businesses or shareholders are aligned with Canadian investment timing.
- Audit alignment of your business-advisory roadmap (export readiness, supply-chain diversification) with the new trade-support environment.
- Engage your accounting and audit teams now to reinforce documentation practices--not only for SR&ED and capital-deductions, but for any reorganisations, M&A or estate-tax planning that will unfold over the next 18–24 months.
Final thoughts
Budget 2025 presents a strategic inflection point for businesses in Western Canada. At Faber LLP we view it not as a passive “tax-event” but as a full-spectrum advisory moment: from structuring your corporate investments, reorganisations and cross-border planning, to re-engineering your business model around innovation, export-diversification and global competitiveness.
With our high-value clientele in Western Canada, the need is evident: we are to stop being reactive in compliance but be proactive with transformation. The clock is also running and the companies that make moves today will also grasp the full worth of the benefits awaiting in the future besides becoming well placed to meet the tough, diversified future that the Canadian budget looks forward to.
If you’d like us to run a customized scenario-analysis for your entity (or entities), reflecting Budget 2025’s incentives and our full service suite, we’re ready when you are.