The Lead up to SR&ED in the Next Budget

There’s been a lot of consternation on what’s likely to happen in the upcoming federal budget – particularly as it relates to SR&ED.

At Davos and increasingly here at home, the feds have indicated that they’re giving serious consideration to the recommendations from the Jenkins report which includes several proposed changes to SR&ED.

For the past few months, we’ve been busy meeting with federal and provincial policy makers to share our perspective and that of our tech community here in BC.

• There are between 1500 and 2000 companies that benefit from SR&ED here in BC.
• Over 5,000 jobs are a direct result of funding supported by SR&ED.
• Every $1 of SR&ED tax credit results in $1 of tax revenue.*

Armed with those figures, we’ve been consistently reinforcing the following messages in reaction to the Jenkins recommendations:

1. Changes to SR&ED should emphasize certainty and expand eligibility NOT move to a labour-only calculation.
2. SR&ED is an Access to Capital issue for SMEs and should allow refundability for non-CCPCs.
3. Ensure that any changes to SR&ED are implemented on a gradual basis to allow companies to adapt.

Now all we have to do is wait to see what the federal budget will look like.

*Based on extrapolating the tax revenue data contained in the venture tax credit study authored by Professor Thomas Hellman at Sauder Business School, UBC. Click here to read the full report.