SR&ED ALERT: Joint Finance Canada-Canada Revenue Agency (CRA) Consultations on Improving the SR&ED Tax Credit Program Announced
October 10, 2007

(Deadline for Submission: Nov. 30, 2007)

For details go to: http://www.fin.gc.ca/news07/07-078e.html

These consultations are a follow-up to last year's commitment of the Federal Government to find ways to improve the program through both legislative and administrative improvements.

In discussions with officials in the Department of Finance and Minister Flaherty's office, our SRED Advocacy team has stressed the need for changes to the legislation to make it more accessible to all Canadian businesses and to minimize the administrative hassles our members are reporting. The importance of legislative refinements is highlighted in CATA's submission to the Minster, Maximizing Canada's Investment in R&D: Opportunities for Improving Canada's SR&ED Tax Credits and Leveraging the Results.

Likewise, it is clear from the CATAAlliance's ongoing consultations on the effectiveness of CRA's administration over the last several years that there are opportunities for improvement by the Canada Revenue Agency.

Please see: http://www.cata.ca/_pvwc8ae40/files/pdf/resource_centres/sred/sred2006consultrpt.pdf and our SR&ED Update July 2007 for a summary of the observations of Canadian businesses on the program's administration.

We are now consulting with members on the content of our formal submission to the just announced consultations of Finance and CRA to improve the program.

Understanding how the tax credits are influencing investment decisions and how to make them even more effective is clearly important to Finance. Finance needs to understand what provisions are working and what would tip the scales in favour of the more innovative but risky investments associated with SR&ED. In addition to developing your own submissions to the consultations of Finance and CRA, we would like to have examples and suggestions to consider as we develop the submission of the CATAAlliance.

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Please send your observations to CATA President John Reid or our Senior Tax Director, Russ Roberts at info@cata.ca