The Canadian Advanced Technology Alliance (CATA) is submitting an “emergency” funding proposal to the federal government to help preserve tech jobs and companies during the COVID-19 pandemic.
The organization is urging the federal government to immediately release $200 million in backlogged Scientific Research and Experimental Development (SR&ED) claims to support Canada’s tech sector and create a new fund to speed up the disbursement of capital.
“We are recommending this mechanism as a simple, fast, and auditable method to distribute funds now.”
In an open letter to Prime Minister Justin Trudeau, CATA CEO Suzanne Grant recommended measures she said would assist 12,000 Canadian-owned small tech companies and help save 85,000 jobs during the crisis. According to The Logic, the pandemic has delayed nearly $200 million in tax credits for tech companies.
SR&ED provides support in the form of tax credits or refunds to corporations, partnerships, or individuals who conduct scientific research or experimental development in Canada.
On March 18, the Canada Revenue Agency announced it was suspending most of its business auditing for four weeks in order to lessen the burden on Canadian companies during the economic slowdown. However, this means that any company scheduled to be audited is not eligible to receive money from the SR&ED incentive program, meaning companies set to receive much-needed funding would have to wait.
As part of CATA’s proposal, Grant recommended the government create a one-time $3.6 billion “Canada Emergency Resilience and Rebound Fund” to provide zero-interest loans to pre-qualified businesses that are currently receiving science and research tax credits.