Canadian Natural Resources Are Canada’s Fourth Largest SR&ED Spender
Canadian Natural Resources Limited has topped the energy sector for research and development, spending $558 million in 2016 on R&D projects. Overall, the company ranked as the fourth largest corporate research spender in Canada.
The firm’s spend on research and development was almost three times that of the second largest spender in the industry, Suncor Energy Inc., whose R&D totalled $200 million. Imperial Oil Limited ranked third in the energy sector at $195 million, while Cenovus Energy Inc. was fourth at $69 million. Syncrude Canada Limited closed the top five at $62 million.
While the investment by the various firms may seem enormous, looking at R&D spend in terms of the percentage of overall revenue provides another perspective. Although Canadian Natural tops the list, its R&D percentage relative to its revenue is only 4.9 percent. Suncor is at 0.7 percent, Imperial at 0.8 percent while Cenovus spends just 0.6 percent on R&D.
Canadian Natural has maintained the top position in oil and gas research and development for several years and even formed a technology and innovation team in 2015. The team’s mandate is to ensure that the company’s innovative culture is sustained through networking and managing technology.
Overall, energy companies have been relatively small contributors to R&D according to Research Infosource rankings and have lagged behind other Canadian industries, although the sector has improved in recent times. In 2016, aerospace was the top-performing sector, with six aerospace companies posting a total spend of $2.69 billion in R&D investment. Software and computer services companies came in second with a combined spend of $1.99 billion by 17 companies. Biotechnology firms came in third at $1.9 billion by 21 companies.
If your company has incurred costs relating to research and development in any industry, try our eligibility test to see whether you could benefit from the SR&ED Tax Incentive. Canadian-controlled private corporations can earn a refundable investment tax credit of 35 percent for up to the first $3 million of qualifying expenditures for SR&ED and a non-refundable investment tax credit of 15 percent on excess amounts.
