Mason also suggested that a tax credit for investors could further help to spur investment in ICT start-ups.  Bristish Columbia currently provides the following tax incentives for venture capital:

• Corporations that invest in a registered venture capital corporation (VCC) or a registered eligible business corporation (EBC) may receive a non-refundable tax credit against British Columbia tax equal to 30 per cent of the investment.
• Individuals who take advantage of the program receive refundable tax credits.

• Changes to SR&ED announced in the 2012 and 2013 federal budgets.
• Changes to the claiming process.
• Trends, risks, and challenges.

Date: Thursday, May 23rd

Time: 11:00am – 12:00pm

Format: Conference call with questions and answers

Registration (online): http://sredupdate.eventbrite.ca

• Funding of $121 million over two years to the National Research Council (NRC) to help the growth of innovative businesses in Canada;
• Funding of $20 million over three years, delivered through a new pilot program at NRC- Industrial Research Assistance Program (IRAP), to help small and medium-sized businesses commercialize their research;
• Funding of $37 million per year, through granting councils, to strengthen research partnerships between post-secondary institutions and industry.
• Funding of $325 million over eight years to Sustainable Development Technology Canada;
• Funding of $37 million from 2014-2015 to support genomics research;
• Funding of $141 over 2 years to secure the supply of medical isotopes and maintain safe and reliable operations at Atomic Energy of Canada Limited’s Chalk River operations.
• Funding of almost $1 billion over 5 years for the Strategic Aerospace and Defence Initiative (SADI)
• Funding of $110 million over 4 years to create an Aerospace Technology Demonstration Program to support large-scale technology projects with cross-industry collaboration.

The government made the following announcements in regards to the SR&ED program:

• The CRA will receive funding of $5 million over two years to allow for more direct contact with first-time claimants;
• The CRA will receive funding of $15 million over two years to review SR&ED claims where the risk of non-compliance is perceived to be high and eligibility for the SR&ED program is unlikely;
• Following its consultation on contingency fees, the government concluded that contingency fee arrangements do not diminish the benefits of the SR&ED program to claimants. Nonetheless, claimants will be required to indicate whether contingency fees were used and the amount of fees payable. A penalty of $1,000 per SR&ED claim form is also introduced for non-compliance in providing the appropriate information.

• SR&ED public general information seminars
• May 15, 2013
• Public seminar on SR&ED issues specific to the information technology sector
• June 19, 2013

Mississauga:

• SR&ED public general information seminars
• May 15, 2013
• June 12, 2013
• SR&ED public seminars on SR&ED financial issues
• June 25, 2013

Ottawa:

Date: Thursday, May 2, 2013
Time: 7:30am to 9:30am
Location: BDO Montreal, 1000 De La Gauchetière West, Suite 200; Montreal, QC

To register, contact Marie-Andrée Jodoin at 514 931 0841 ext. 2403 or e-mail her at mjodoin@bdo.ca.

Given the current climate of fiscal restraint, the CMA welcomes any initiatives that are geared towards:

1. Transforming the creativity of Canadians into products & services for the global marketplace.

2. Introducing a training tax credit for communications technology.

3. Making the Accelerated Capital Cost Allowance on machinery and equipment permanent.

4. Investing in basic literacy and numeracy skills.

5. Improving the SR&ED tax credit program.

1. The Business Number of each SR&ED practitioner will be required with each SR&ED claim, along with details regarding the relevant billing arrangement
2. A new $1,000 penalty will be levied in situations when information regarding third parties that assisted with claim preparation is missing, incomplete, or inaccurate.  The taxpayer and the SR&ED practitioner may be held jointly liable for the penalty.

It is anticipated that the CRA will target the claims of taxpayers which have been prepared with the assistance of SR&ED practitioners that have been identified as advocating aggressive filing positions.

In 2007, the federal government provided approximately $305 million worth of tax credits to oil, gas, and mining companies to offset costs related to technology and innovation.  However, the 2012 federal budget has trimmed its support for the SR&ED program, and once these cuts take effect in 2014, (1) the basic refund rate will be reduced from 20 percent to 15 percent, and (2) oil and gas companies will no longer be able to claim SR&ED on capital expenditures.

Finance Minister Jim Flaherty has admitted that a leaner SR&ED tax credit program is not popular with large businesses who conduct research and development in Canada.  However, Flaherty dismisses suggestions that SR&ED cuts could seriously undermine innovation in Canada.

Gradek Energy, a small Montreal-based cleantech firm disagrees with Flaherty.  President Thomas Gradek believes that the SR&ED cutbacks could increase the cost of large scale projects substantially.  Without the SR&ED program subsidy, pilot projects related to cleaner oilsands will no longer be economically viable.  And without these pilot projects, the expenditures related to a large commercial scale deployment could cost up to 20 times more.

[ Read More ]

More from the Winter 2012 issue:

• Support Your Next Capital Acquisition With Government Grants
• New SR&ED Policies Released By CRA
• SR&ED Appeal Ruled In Airmax’s Favour

Canadian politicians have long supported the oilsands throughout its ups and downs, which has resulted in the recent Alberta budget crisis. The Redford Alberta government is expected to run a $4 billion deficit due to declining oil revenues.

May also points out that Canada’s policy response in the March 2012 budget was met with widespread skepticism. During this budget, the SR&ED program was overhauled – funding was taken away from the SR&ED program and made available for direct grants. The “picking of winners” by government has an empirically lousy record.

May believes that as long as Canada’s policies continue to stress the non-renewable resource sector, Canada will continue to under-perform globally in the commercialization of new research and development technologies. Canada needs to devise a strategy that (1) invests more in innovation, and (2) is decoupled from non-renewable resources via further investments in green energy technologies.