Deloitte Survey Finds SR&ED Changes Makes Canada Less Globally Attractive for Investment

The 2012 federal budget shifted some of the support for SR&ED into targeted grant programs, such as IRAP.  Deloitte conducted an online survey to capture the private sector’s perspective on these changes. In general, the majority (66.7%) of all respondents believed that the direct funding will not sufficiently compensate for the reduction in SR&ED tax credits, when fully implemented. Respondents indicated that Canada will be less globally attractive due to:

1. Known incentives (SR&ED) being more attractive than potential grants
2. The rising cost of compliance against a smaller SR&ED credit
3. The decrease in SR&ED increases marginal tax rate of companies
4. Less R&D incentives for multinationals
5. Less dollars available for R&D
6. Other countries offering more attractive incentives