Industry Survey Says Canada's SR&ED Program Not Working the Way It Should
October 29, 2007

 

"Maintaining the best practice aspects of Canada's SR&ED tax incentive program is an integral part of our Innovation Nation Campaign, moving Canada from 14th to first place in Innovation leadership."

Ottawa, Oct 30, 2008... Today, the Canadian Advanced Technology Alliance (CATAAlliance) as part of its Innovation Nation Campaign released the results of their 2007 web consultations on Canada's Scientific Research & Experimental Development (SR&ED) tax incentive program. This year's web consultations focused on the Canada Revenue Agency's (CRA's) administration of the SR&ED program. The report on these consultations, On-line Consultations on Administrative Aspects of the SR&ED Tax Incentive Program, 2007 Consultation Report, includes the observations of more than 200 participants on what is working in the administration of the SR&ED program and what needs to be improved.

John Reid, President of the CATAAlliance, said that "this year's consultations on the SR&ED program provide important information for all interested in its improvement."

Mr. Reid went on to say that:

The Federal Government should be complimented for its commitment to finding out what refinements to the incentives are needed through its current joint Finance and CRA pre-budget consultations on the program. The CATAAlliance report shows clearly, that while the SR&ED program is working for many, for many others, it is not working the way it should. In the CATAAlliance's opinion
  • too many participants report that the CRA is ignoring its own public guidance and policies; and
  • too many participants indicate that the audits are getting more difficult, that they are confused about what is supported by the tax credits and what documentation is required to support their claims.

He noted that "the comments of larger firms found in the results of CRA's own survey done in 2005 should certainly be raising concerns for all of us. By far, these firms are the primary clients accounting for the bulk of the incentives and the program must be working efficiently for this group if the incentives are to be a success.

Russ Roberts, Senior Director (SR&ED) with the CATAAlliance, stressed that the Government needs to hear from users of the program about what is working and how to improve it. Mr. Roberts added that joint Finance and CRA pre-budget consultations closing at the end of November are an important opportunity for Canadian firms to influence the next budget. This is a real opportunity to explain to decision makers what has to be done to make the SR&ED incentives really functional and useful to all Canadian firms, what needs to be done to improve the administration of the SR&ED program, and the consequences of not doing so."

Reid concluded "Maintaining the best practice aspects of Canada's SR&ED tax incentive program is an integral part of our Innovation Nation Campaign, moving Canada from 14th to first place in Innovation leadership."

++ Action item:
please view copies of The On-line Consultations on Administrative Aspects of the SR&ED Tax Incentive Program, 2007 Consultation Report and the SR&ED Tax Incentive Program Canada Revenue Agency (CRA) 2005 Claimant Satisfaction Survey Analysis of the CRA's Report on the Results of their Survey