A new 2013 ruling for Immunovaccine Technologies Inc. v H.M.Q. (Tax Court Canada docket 2011-245ITG, 10-Apr-2013) found that Immunovaccine failed to subtract a $3.7 million loan received from ACOA from its SR&ED expenditures.
The CRA requires “government assistance” to be deducted from the SR&ED expenditure base; prior to this ruling, government assistance was found to be funds provided under terms more favourable than what a for-profit commercial lender would demand. As new direct funding sources are introduced by the government in the next few years, companies will have to balance the benefit of the new funding against the loss of SR&ED tax credits.
