Major Tech Group Calls for the Creation of an Independent Authority to manage Canada’s $3 billion SR&ED tax incentive program
September 23, 2016

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Ottawa, ON...CATAAlliance, Canada’s One Voice for Innovation Lobby Group has called on Navdeep Bains, Minister of Innovation, Science and Economic Development, in collaboration with Cabinet Ministers, to introduce an Independent Authority to manage the SR&ED tax incentives program.

The proposal for the Authority was outlined on Facebook Live by CATA Sr. VP, Russ Roberts, who led team of experts in the development of terms and conditions.


Listen to CATA Sr. VP on Facebook Live: Advocacy Update

CATA CEO, John Reid, said, " After three decades of continuous advocacy by the business community for improvement in the SR&ED program, serious, longstanding issues with the SR&ED program persist. Our innovation driven community is discouraged and many are doubters. If these issues are not fully addressed now we reduce our prospects for becoming a top ranking competitive innovation nation success."

A recent paper by Brian Cookson of RDP Associates — comparing the Canadian and UK tax credit systems — bears out the claim that CRA interpretations and documentation requirements are overly onerous and discourage ICT innovation. The UK has leveraged a similarly focused system to dramatically improve its R&D/innovation ranking. And whereas the UK tracks and regularly reports on the effectiveness of its R&D tax credit program, the CRA does not. A 2015 study of the UK system found that "For every £1 of R&D tax credit given out, £1.53 to £2.35 of additional expenditure by UK firms is generated", compared to just $1.38 in Canada.


CATA reached out to tens of thousands of executives in opt in social networks, advisory board members, including video interview commentary, subject area experts and research teams, to advance innovation guidance in 12 thematic areas, inclusive of new tax incentive models.


Details are available at: http://www.cata.ca/Media_and_Events/Press_Releases/cata_pr08041601.html

Responsibilities of the proposed Independent Authority

  • review both refundable and non-refundable claims for SR&ED tax credits in the sector to determine if they meet definitions of SR&ED and are reasonably supported;
  • have certificates of eligibility issued after review at the concept phase;
  • monitor progress and do onsite reviews as necessary;
  • provide truly independent and timely redress processes;
  • review claims for eligibility under the new refundable labour based "digital innovation" tax credit we propose for outside the SR&ED program, as described below;
  • review claims for eligibility under the proposed new "innovation box" tax credit aimed at promoting the commercialization of successful innovations;
  • This tax credit will require companies to benchmark their current status and the business model for their innovation(s) and development plans;
  • where definitions are met and it is appropriate, issue certificates of eligibility upfront so claimants file at the concept phase of the work. The CRA would still provide financial reviews;
  • evaluate the new "digital innovation" and "innovation box" tax credits for effectiveness and ease of use as well as SR&ED to determine what modifications could improve the concepts;
  • Create and monitor a truly third party redress process;
  • evaluate the effectiveness of the various tax credits available to companies in the ICT sector, compared with international best practices; and,
  • report annually on the results of the programs, the evolutions and proposals for improvements.

Full details on " Making the case for a 3 billion dollar SR&ED tax authority " can be viewed at:
http://www.cata.ca/Media_and_Events/Press_Releases/cata_pr06081601.html

CATA CEO, John Reid, said, " Progressive approaches to Canadian government innovation tax incentives can help put Canada on the map as a global innovation hub. The way forward is to act on a bold new public policy vision: to build Canada as a global centre for innovation."

He concluded, " We applaud Minister Bain’s open, transparent and engaged approaches to innovation consultations with citizens and his leadership for helping to advance new ways forward."

About CATAAlliance

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The Canadian Advanced Technology Alliance (CATAAlliance) is Canada's One Voice for Innovation Lobby Group, crowdsourcing ideas and guidance from thousands of opt in members in moderated social networks in Canada and key global markets. (No Tech Firm Left Behind) Contact: CATA CEO, John Reid at jreid@cata.ca