Outlook Survey Shows Manufacturers Poised for Growth in 2014

Posted on December 20, 2013 by admin

The results of this year’s PLANT Manufacturers’ Outlook Survey, based on 450 replies from senior manufacturing executives, suggests that manufacturers expect growth to be higher in 2014.  Analysts have been predicting modest growth of 2.3% over the next five years.

The highlights of the survey include:

  • Companies are getting most of their revenue from Canada (62%) and the US (27%) but business is going up by small steps in other areas such as Western Europe (2.6%) and China (almost 2%).
  • Access to financing continues to be the biggest growth constraint, according to 49% of the executives, while 71% intend to finance using internally generated cash flow.
  • More companies anticipate hiring over the next three years (58% compared to 54% in 2013), adding new lines of business (43% from 39%), and 33% intend to expand their plants.
  • The largest priority for the next three years is investment in machinery and equipment (76%).
  • On the innovation front, 32% of companies intend to spend 1% to 3% on R&D, but 27% are not sure what they will spend, and 47% plan to take advantage of the SR&ED tax credit.
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Changes to SR&ED T661 Form

Posted on December 12, 2013 by admin

The Canada Revenue Agency (CRA) has released the T661(13), which accommodates the legislative changes that will come into effect on January 1, 2014.  The old T661(12) version of the form can be used until until December 31, 2013. Starting January 01, 2014, the CRA will accept only the T661(13) version of the form for all tax years.

The following changes have been made:

  • Removed lines 223 to 229 in Part 2.
  • Removed lines 230 and 232 in Part 2. The relevant information from these lines is now requested on lines 620 and 622 in Part 7.
  • Temoved lines 235 to 238 in Part 2.
  • Consolidated former Sections B and C in Part 2 so that all claimants answer the same three questions in Section B; Changed the order of the questions in Section B.
  • Introduced notes in Parts 3 and 4 to advise that expenditures for capital property or the right to use capital property can no longer be claimed after December 31, 2013.
  • Changed the descriptions for lines 350, 355, 390, and 504 to reflect that expenditures for capital property or the right to use capital property can no longer be claimed after December 31, 2013.
  • Changed the description for line 820 to accommodate the 10% reduction in the prescribed proxy amount (PPA) for the number of days after December 31, 2013, in the tax year.
  • Introduced new Part 9 to capture SR&ED claim preparer information.
  • Part 10 is formerly Part 9–Certification.
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Why We Need to Open up to Innovation

Posted on December 2, 2013 by admin

Pierre Beaudoin, President of Bombardier Inc., delivered a speech to business leaders in Toronto  on Wednesday, Nov. 13, as part of the Maclean’s Thought Leadership series.  During this speech, he suggested that the taxable income and capital thresholds to qualify for the small business refundable Scientific Research and Experimental Development (SR&ED) tax credit of 35% should be raised to alleviate some of the pressure faced by pioneering SMEs.   Beaudoin believes that this would directly benefit the cash- strapped SMEs who have few options for securing the early-stage funding needed to advance their innovative ideas.

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Ontario Economic Update Suggests Replacement of R&D Tax Credits with Incentive to Reward Incremental R&D

Posted on November 15, 2013 by admin

The recent Ontario Economic Update included proposed measures intended to promote capital investment including replacing existing R&D tax credits (SR&ED) with an incentive that would reward incremental  R&D spending. This new credit would redirect support to incremental R&D expenditure growth,  to encourage businesses to increase R&D and expand research operations in Ontario.

Ontario also proposed “pay or play” tax incentives, such as a special corporate tax
that could be eliminated or reduced through investments in new equipment or other eligible  investment expenses, and a payroll tax that could be eliminated or reduced by employer investments in employee training or training programs.

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SR&ED T661 Form Revised for Part 9 Claim Preparer Disclosure

Posted on November 6, 2013 by admin

The T661 form, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, has been revised to include additional prescribed information for SR&ED claim preparers.  If a claim preparer was engaged with the preparation of the SR&ED claim, the information below will need to be disclosed in part 9:

  • The name of each claim preparer that has accepted consideration to prepare or assist in the preparation of the SR&ED claim;
  • The business number of the claim preparer. For individuals, the Goods and services tax (GST) or Harmonized sales tax (HST) number of the claim preparer must be provided;
  • The billing arrangement code for the claim preparer as described in Form T661 Part 9 in the list of Billing arrangement codes;
  • The billing rate;
  • Any other billing arrangement (if other than those identified under Billing arrangement codes in the T661 Part 9); and
  • The total fee paid, payable or expected to pay.

Part 9 must be signed and dated by the authorized signing officer of the corporation, and Part 9 must be completed with Form T661.  For claims filed on or after January 1, 2014, a penalty of $1,000 may be assessed for each SR&ED claim that has incomplete, missing, or inaccurate claim preparer(s) information.

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