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Jamey Greene allows water to drain from his gold pan as he prospects for gold on Feb 23, 2005 near Friant, CA.ERIC PAUL ZAMORA

Springtime in Canada almost always means one thing: budget season.

As provincial budgets culminated in last week's federal Economic Action Plan 2012, small and medium-sized business (SMB) owners might not be sure whether there was something in it for them. There were no changes to the corporate income tax rates for small-business income, or to the $500,000 small-business income limit of a Canadian-controlled private corporation (CCPC).

But dig a little deeper and you'll find the budget includes a host of smaller incentives that add up to real support for the entrepreneurial sector. What matters now is what you do with it, and how you use it to push ahead.

Innovation has become the word of the day, with pundits and politicians alike hailing it as the way out of economic turmoil. SMBs have a chance to seize that opportunity, and capitalize on innovation-oriented measures and incentives.

As part of the government's efforts to support jobs and growth through innovation, it has decided to put some money where its mouth is. The budget proposes $1.1 billion over five years to directly support business-led and industry-relevant research and development (R&D). That's good reason for entrepreneurs to do what they do best – imagine the future, and design a plan to create it.

So much of what a business does could qualify as innovation, and entitle the owner to additional funding. First comes the seed of the idea, then comes the discussion around how it might line up under Canada's R&D funding plans. You might be surprised at what you discover, in every sense of the word.

The federal government has also put a further $400 million on the table to help increase private-sector investments in early stage risk capital, and to support the creation of large-scale venture capital funds led by the private sector. The budget also reaffirms that Business Development Bank of Canada (BDC) will see a $100 million influx to support its venture capital activities. With credit availability still tight, and more competition than ever before to secure capital, this is welcome news for entrepreneurs.

Time and again, entrepreneurs who respond to Ernst & Young surveys say access to capital is the greatest barrier to their own growth. With new waves of cash flowing into the economy, possibilities could open up. So tap into your network, ask smart questions, make the right connections, and find out how you might access a greater piece of that pie.

While it might seem small, the budget's one-year extension of the temporary hiring credit for small businesses shouldn't be written off. The maximum credit is only $1,000, but it could make a difference when factored into the big picture.

New administrative measures could also generate cash for Canada's small businesses. The budget will allow companies to designate all or a portion of their dividends as "eligible dividends." This could save some companies extra legal fees as they'll no longer need to separate dividend payments.

That said, as with any budget, we'll see cuts and new fees, too. Small-business owners need to be aware of a new proposed tax aimed at curtailing perceived abuses involving income splitting and employee profit-sharing plans. Informing yourself on these issues is crucial.

But while the plan looks to streamline other areas to pay for the new or improved innovation incentives, entrepreneurs – for the most part – won't find themselves under the knife. Small CCPCs will be immune to scientific research and experimental development (SR&ED) tax credit rate cuts planned for 2014. The refundable investment tax credit rate for these companies will stay steady at 35 per cent — much more favourable than the reduction to 15 per cent from 20 per cent for larger corporations, and a strong incentive for smaller, entrepreneurial firms to continue innovating in the years ahead.

Capitalizing on this, and the myriad other small incentives, could open up some opportunities within your business and add a sizable cushion to the bottom line.

Special to The Globe and Mail

David Steinberg is a partner and co-leader of the GTA Private Mid-Market Practice at Ernst & Young LLP.

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