From our friends at The Ingenuity Group. The last time that a major report came out offering recommendations to the SR&ED program, the effect was profound. In 2011, Innovation Canada: A Call to Action – colloquially known as the Jenkins Report was released. One of the recommendations was to modify the SR&ED process to help small businesses scale into larger firms by basing the credit on labour costs. Consequently, Stephen Harper’s government made changes in the 2012 Federal Budget that had significant impacts on the SR&ED program the following year. Changes included reducing the investment tax credit rate from 20 percent to 15 percent. Many of the changes were based on the recommendations of the Jenkins Report.
Could the same thing happen again? Perhaps it is already happening. In September, the Department of Innovation, Science and Economic Development Canada published a report on its website called the Report from Canada’s Economic Strategy Tables. In it, there are recommendations to make it easier for larger Canadian corporations to benefit from the SR&ED tax credit. Could this mean that in next year’s federal budget – and do not forget that 2019 is an election year in the federal government – there could be significant changes to the SR&ED program that will make it harder for Small and Medium Enterprises (SMEs) to obtain the tax credit?
Read the full article as it examines the changes outlined in the report.
Contact us for more details on non-dilutive venture debt, SR&ED Financing, and tax credit consulting services. Venbridge’s services allow you to maximize your government tax incentives, better manage cash flow, and invest more in the areas you need.