Liberal Governments “Innovation Agenda” Chopping Billions from SR&ED
Scientific Research and Experimental Development tax credit (SR&ED) was introduced in 1986, but has existed for much longer but in other forms. SR&ED supports business research and development and is the largest federal program to do so.
The Canadian Advanced Technology Alliance (CATA) has accused the Liberal government of cutting out billions of dollars from programs aimed at bettering the private sector R&D across Canada; a lot of business being in tech companies in Ottawa. The Liberal government has said their “innovation agenda” is going to boost economic growth.
The argument that CATA has is that this money that is focused towards boosting economic growth is no substitute for programs like the Scientific Research and Experimental Development tax credit (SR&ED).
In 2008-2009 the government -commission report raised concerns about the cost of the SR&ED program. The CATA’s research has said that the Canada Revenue Agency (CRA) has handed out over $4 billion worth of tax credits in relation to SR&ED. In 2010 the SR&ED tax assistance dropped to $3.3 billion, dropping 19.5 percent. This meaning that $5.3 billion was removed between 2010 and 2016. While the CATA does say that there are definitely ways to improve SR&ED, they fear that the government will quietly cut the program and declare that it is no longer useful to the economy before having the chance to improve.
Jeffrey Dale the former president of the Ottawa Centre for Research and Innovation says that “SR&ED needs to stop trying to be all things to all companies and should instead be broken up to achieve different results.”
If you would like to find out more about SR&ED and how your business could benefit from it, contact a Swanson Reed R&D Tax Advisor Today.