John Lester of the School of Public Policy recently released a report which analyzed the changes to Canada’s innovation polices as per the 2012 federal budget.
The budget makes some sensible changes to the SR&ED program, but Lester argues that the decision to reduce support for large firms is a step in the wrong direction. Based on his analysis, Lester proposes that imposing a flat 20 percent tax incentive for firms of all sizes would create a increase in the net economic benefit from the SR&ED tax incentive.
Lester also argues that high delivery costs are preventing IRAP from generating a net economic benefit. Unless costs are reduced from delivery, the additional funding allocated to IRAP will substantially increase the net loss from the program.
