By Government of Saskatchewan

Small and Medium Business Tax Credit Arrives in Saskatchewan

Mar 27, 2025 | 11:38 AM

Pilot Project Supports Small and Medium-Sized Businesses in the Food, Beverage, Machinery and Transportation Sectors

The Government of Saskatchewan has introduced legislation that will see the creation of a new Small and Medium Enterprise (SME) Tax Credit.

“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,” Trade and Export Development Minister Warren 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 program is a three-year pilot, which will function similar to the province’s successful Saskatchewan Technology Startup Incentive (STSI). The pilot targets enterprises in the food and beverage manufacturing, and the machinery and transportation equipment sectors.

The program will include a 45 per cent non-refundable tax credit for individuals or corporations who invest in the equity of an eligible Saskatchewan SME. It will have an annual cap of $7 million on the total non-refundable tax credits awarded, processed on a first-come first-served basis. An eligible SME is defined as a Saskatchewan-based business with between five and 49 employees, with a minimum of 50 per cent of those employees residing in Saskatchewan.

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Since 2014, the number of small businesses has risen 4.9 per cent in the province.

Private capital investment in Saskatchewan increased last year by 17.3 per cent to $14.7 billion, ranking first among provinces for growth. Private capital investment is projected to reach $16.2 billion in 2025, an increase of 10.1 per cent over 2024. This is the second highest anticipated percentage increase among the provinces.

The SME Tax Credit pilot program will be in effect from July 1, 2025 to June 30, 2028. The program will begin accepting applications in late 2025.