Dealing with technology? You might be eligible for government funding

SR&ED (Scientific Research & Experimental Development) is an incentive program by the Canadian government that refunds companies involved in Research and Development (R&D). (See the information about the program on the CRA website.) Canadian companies that spend money on creating or modifying products or processes through experimenting are eligible for SR&ED. Any company that deals with technology (software and hardware development, machinery, printing etc.) may qualify. If you created an entirely new industrial process or improved an existing one, if you took a database driver and rewrote it so its performance doubled, if you came up with a fuzzy logic algorithm to facilitate scheduling - all of this may be eligible. Innovation, uncertainties you overcame, and technological advancement are the criteria for eligibility. Even failed experiments may qualify. Non-Canadian owned companies also qualify, if they pay salary in Canada.
The SR&ED program is available to companies involved in Research and Development (R&D). Eligible expenditures include your time, employee and subcontractors labour, materials and equipment. SR&ED money is given as a refund for work already done.
Read more about SRED

When Is A Consultation?

This article is by Bruce Madole who kindly agreed to provide some interesting materials related to SR&ED.


The Canada Revenue Agency (CRA) has been releasing draft policy documents on the SR&ED Program for public comment over the past few months, as a part of an ongoing policy review exercise.  They have done so at a time when the SR&ED Program is under intense scrutiny, the subject of two separate review exercises (The Expert Panel, and a report expected (someday) from the Taxpayers Ombudsman.  Various deadlines for comments have come and gone, with individuals and industry groups responding.  Still, it remains to be proven whether this is really a consultation, or merely another preemptive exercise in political and public relations damage control, designed to deflect expected criticism.
If there’s one thing they understand perfectly well up there in Ottawa, it’s the art of the Cabinet shuffle. Politicians and bureaucrats have this down pat.  Just when the public and the press really begin to ratchet up the heat and to focus on the deficiencies of a situation – boom – everything’s been changed around.


Seldom does this exercise involve real, substantive change. It’s usually about “managing optics”.  However, the people who plan these things understand full well that they are at minimum buying themselves time.  They can say, as the questions, accusations, etc. pour in:  “See – we’re ahead of you… we’re already dealing with that. Change is already happening.”
Most of the time, it’s not.  But it also takes more time to confirm that.  And some of the time, change means making things worse (but different)… and it takes time to confirm that, too.
So the skeptic in me has always had doubts about the timing and purpose of this current convulsion of change.  CRA’s current policy consultation on SR&ED feels ominously like an optics exercise.
I ask myself, though, what would be the point?  Why go to all of this work, this turmoil, if there’s no intent to even attempt positive change?  (Even as a teenager, I learned that it’s more tiring and troublesome to pretend to be working than it is to, you know, work).

If you think about it, though, despite all of the flurry of activity around claim review process, policy and guidance documents, and so on … I haven’t yet heard about anything that represents a substantive change to the Income Tax Act (or regulations) and the real bones of the SR&ED program. If anything, there appears to be a real, renewed determination on the part of the CRA to get more traction out of the content of the jurisprudence related to Northwest Hydraulic Consultants Ltd., and the definitions surrounding it.
Does all of this fuss amount to the equivalent of a new coat of paint and some new shutters, applied on top of an old house?
Probably not.  I think it’s more than that … but we’ll have to wait and see.
When is a consultation really a consultation?  When somebody’s actually listening, and paying attention. We won’t know for sure until the dust settles, though clearly current trends are not promising.  In the absence of constructive change, consultation may well be another political charade:  more smoke and mirrors.  That would be a shame.




Bruce Madole
Other articles by Bruce Madole in SRED Unlimited blog