Budget focuses on digital innovation & boosts food supply chain

The 2025 Federal Budget has placed a renewed emphasis on catalysing innovation and digital transformation across key sectors, with particular attention to the food supply chain and productivity incentives for Canadian business.

Industry leaders and tax experts are weighing in on the measures outlined, highlighting both the immediate and long-term implications for consumers, local producers, and the broader Canadian economy.

Technological transformation in food supply

Peter Hwang, Co-Founder, President and Chief Executive Officer of Tre'dish, commented that the Federal Budget must address the role of technology in dealing with soaring food prices. Hwang underlined inefficiencies in the existing food supply system which, he argues, disproportionately affect consumers.

"Tomorrow's Federal Budget must recognize that technology is the key weapon in the fight against Canada's escalating food inflation crisis. For too long, the food supply chain has been defined by unnecessary middlemen and costly inefficiencies. This burden lands squarely on the consumer."

Jack Chorley, Co-Founder and Vice President of Engineering at Tre'dish, reflected on the responsibility of the government to guide the sector's digital evolution.

"The government has a responsibility to incentivize digital transformation and the strategic adoption of AI within the food sector. Platforms like Tre'dish demonstrate how technology can flatten the supply chain and understand customer patterns to connect consumers directly to local producers to offer better prices and fresh, high-quality groceries. Investing in this kind of innovation won't just alleviate immediate cost pressures; it will build a more resilient, affordable, and equitable food system for all Canadians."

The comments underscore a perspective within the agri-tech sector that digital platforms and supply chain streamlining can provide consumers with improved access to goods while supporting local businesses. By promoting direct connections between producers and buyers, such approaches are anticipated to help mitigate the impact of price inflation on Canadian households.

Productivity and innovation measures

Greg London, Domestic Tax Leader at BDO Canada, provided analysis focused on the budget's support for long-term business investment and the development of Canadian intellectual property. London noted that Budget 2025 prioritises resilience and future economic capacity over immediate fiscal gains.

"Budget 2025 is focused on long-term investment rather than short-term revenue generation, with incentives and credits to improve productivity and innovation proposed throughout. These are not easy steps, but they are future-proofing steps that aim to help build a stronger, more self-sufficient Canadian economy for the long haul."

Among the business-oriented measures, London highlighted changes aimed at keeping research, development, and manufacturing within Canada. The introduction of the Productivity Super-Deduction incentive and proposed adjustments to the Scientific Research and Experimental Development (SR&ED) programme are central to this approach. The budget proposes increasing the SR&ED expenditure limit to CAD $6 million, with the intention of offering greater flexibility for businesses seeking to expand domestically.

"From a business perspective, it's clear that Carney is trying to create a bulwark to keep investment, innovation, and people in Canada, with measures like the Productivity Super-Deduction incentive and changes to the SR&ED program being introduced. By making it easier for manufacturers and builders to decide to scale here and proposing to increase the SR&ED expenditure limit to $6M, more businesses should be able to stay and build in Canada. I'm hopeful that the measures introduced today will encourage businesses to make investment decisions they may not have made before."

London also noted the absence of new wealth or luxury tax initiatives within the budget. The removal of the Underused Housing Tax and the luxury tax on boats and planes was interpreted as a move to encourage high-income earners to retain their financial activities within Canada, a point of interest given the ongoing debates surrounding capital flight and domestic investment.

"When it comes to personal tax measures included in Budget 2025, it was interesting to see that there were no new wealth, luxury, or estate tax measures introduced. In fact, the Underused Housing Tax (UHT) and the luxury tax on boats and planes were removed today with the tabling of the budget, which points to Carney trying to encourage high income earners to stay here and continue to build here."

Stakeholder expectations

The Federal Budget's direction has drawn cautious optimism from technology and business leaders who see digital adoption and investment incentives as potential levers for long-term resilience. The focus on digital transformation in food supply and the alignment with domestic innovation objectives is seen as a response to mounting pressures from both inflation and competition for talent and capital on a global scale.

Industry stakeholders are closely monitoring the impact of policy measures on real-world outcomes, particularly in terms of supporting affordability, business productivity, and retaining homegrown talent and innovation.