Advocacy

The Voice of Our Industry

The Voice is a platform to discuss key advocacy positions on issues that are important to our industry.

The purpose of The Voice is to prompt and promote discussion and garner your input so we can better understand your perspective and advocate the issues of most importance to BC’s technology community.

October 2011

Federal Panel Recommends Changes to SR&ED for SMEs

Last week, the expert panel leading the Review of Federal Support to R&D in Canada tabled its recommendations to the Government of Canada. While much of the report echoes the concerns and positions of the BCTIA and its members, a few of the recommendations, most notably those around changes to SR&ED tax credits for SME’s, and changes to the structure of the National Research Council are more controversial.

Overall, the report is broad-based in its approach and offers a solid, substantive look at innovation in Canada. However, the findings are far from earth shattering and the recommendations are relatively modest in tone and short on specifics.

The report constitutes recommendations of an external panel. They are not specific policies that the government will necessarily implement, but reflect valued opinions that the government may consider in due course.

In all, there were six key recommendations that set out a framework for action:

1. Simplify the SR&ED program by narrowing the tax credit to only encompass labour-related costs. Corollary to this recommendation is to potentially increase the tax credit rate and to also apply any program savings towards directed funding initiatives. To start, these changes are only recommended for CCPC SMEs, with a further recommendation to later extend the rules to other segments. The report also recommends that the CRA strengthen its Pre-Claim Project Review service to provide firms with pre-approval of their SR&ED eligibility.
2. Innovation as part of Procurement. Emphasize business innovation as one of the key levers in public procurement with the net effect of supporting innovation from Canadian companies.
3. Increase the innovation capital pools available for start-up and growth-stage companies. The report recommended dedicating a portion of BDC’s portfolio to start-up stage financing, leveraging where possible angel investment, and increasing BDC’s overall funding to support later-stage venture capital funds.
4. Create an Industrial Research and Innovation Council. This would seek to consolidate many of the government programs and activities under a common umbrella to make it simpler for SMEs to access and navigate. It would also provide the capacity to extend IRAP’s traditional program efforts to include early commercialization activities. This entity would also be responsible for developing a business talent strategy for innovation.
5. Transform the National Research Council (NRC) into a group of sectoral, collaborative R&D centres involving universities, businesses and the provinces.
6. Identify a lead minister responsible for Innovation and improve the coordination of the innovation agenda across federal and provincial governments.

To view the full document containing BCTIA's Recommendations and Actions, please click here.

We welcome your thoughts and recommendations on these latest updates. Please forward all comments via email to btam@bctia.org.

Bill Tam
President & CEO
BC Technology Industry Association