From Sreducation, to follow is a summary of the party positions on SR&ED from each of the 3 federal parties.
Liberal Party
According to Ted Hsu (Liberal Critic for Science and Technology), there are too many illegitimate SR&ED claims. He believes that the SR&ED program should not be “narrowed,” but instead reformed to crack down on illegitimate claims:
- Companies should notify the CRA within 3 months of project commencement that activities will lead to a SR&ED application.
- The time it takes to file SR&ED should be shortened. The 18 months a company has to apply should be shortened to 6 months.
Conservative Party
The Conservative party favours lower taxes and smaller government. They left the SR&ED program largely intact for SMEs in the 2012 federal budget, but made 4 key changes:
- Removal of capital from the expenditure base (for capital expenditures incurred in 2014)
- Reduction of the proxy to calculate overhead costs from 65 percent to 60 percent for 2013 and to 55 percent after 2013 (to be fully phased in as of January 1, 2014)
- Reduction of contract payment eligibility to 80 percent of the payment (effective January 1, 2013)
- Reduction in the General Investment Tax Credit rate from 20 percent to 15 percent (effective January 1, 2014). This will not affect organizations that qualify for the enhanced rate of 35 percent.
As per the recommendations from the Jenkins Report, the Conservatives moved the savings from the SR&ED cutbacks into direct funding models, specifically providing new funds to the National Research Council’s IRAP program.
New Democratic Party
The NDP have criticized the Harper government for failing to lead on research and development funding, and have called for a national innovation strategy to create high-paying Canadian jobs. According to Helene LeBlanc, the NDP critic for Science and Technology, the Conservative government’s 2012 budget drew a timid course to close Canada’s long-standing innovation gap that will likely leave us lagging behind in the knowledge economy. She suggests that Canada needs to accelerate towards an innovation strategy that strikes a better balance between direct and indirect funding.
