Big Changes in the Federal Government's SR&ED Program Announced January 2010

On January 13, 2010, the federal government announced significant improvements to the Scientific Research and Experimental Development (SR&ED) Tax Incentive Program.

The Canadian Revenue Agency’s official press release of the anouncement can be read here: (http://www.marketwire.com/mw/release.do?id=1101322)

"Our Government understands the importance of research and innovation to our country's present and future economic prosperity," said the Honourable Jean-Pierre Blackburn, Minister of National Revenue and Minister of State (Agriculture and Agri-Food).

"By offering generous investment tax credits, we are encouraging Canadian corporations to invest in innovation and to develop new products, services, and technologies."

In essence, the federal government has directed the CRA to process claims more quickly. Currently, it often takes five or six months for a company to receive the cheque for their SR&ED claim. The federal government wants to get the money into the pockets of claimants much faster than this.

The federal government has also directed the CRA to put a much greater emphasis on working with claimants, including being clearer in their explanations as to why a claim was turned down.

In addition, in the course of the CRA’s review of a claim, they are to identify additional unclaimed work and allow the claimant to resubmit their claim to include this work.

The government says it will soon make further announcements regarding more planned enhancements to the program. These changes will be geared to increase the consistency of the CRA’s process for reviewing claims.

The bottom line is this: the federal government supports SR&ED as a business incentive tool and is working to make funding more easily accessible for eligible Canadian companies.

Don’t miss out!

SR&ED is the largest single source of federal government support for industrial research and development. It encourages businesses to conduct research and development that may lead to new, improved, or technologically advanced processes or products.

The program distributes about $4 billion annually to more than 18,000 Canadian businesses.