Canadian Manufacturers & Exporters (CME) has created an online petition to voice their opposition to the recent changes to the SR&ED program. CME’s recommendations to the federal government are as follows:
- Large companies should be provided with a partially refundable tax credit to offset the ITC reduction from 20% to 15%.
- Refundability to be expanded to unused tax credits so businesses can invest in future R&D projects.
- Accelerated depreciation rates should be provided for capital expenditures related to R&D.
- The reduction of the proxy on labour should be reviewed in regards to the administrative burden this reduction will have on the cost of compliance and on the CRA.
- The proposed changes to the SR&ED program should be excluded from the second Budget Implementation Bill, and be addressed in a separate bill to provide it the attention it deserves.
- The CRA should be made to respect their mandate to administer the program without changing the rules governing the eligibility of activities. Efficient processes should be put into effect to lessen the confusion that takes place in the interpretation of current rules.
Recent study found that the majority of manufacturers will divest of R&D if capital costs are ineligible for SR&ED tax credits: http://www.northbridgeconsultants.com/blog/2012/10/19/manufacturers-will-divest-of-rd-if-capital-expenditures-exempted-from-sred/