Innovation nation: The power of SR&ED in Canada
Canada is becoming a formidable leader in global markets for Scientific Research and Experimental Development (SR&ED). Learn how the SR&ED tax incentive program helps support the commercial viability and impact of organizations across the country.
Scientific Research and Experimental Development (SR&ED) is all about big ideas, creative change and disruptive technology. With Canada’s current political climate and a new administration that is keen to foster business innovation, SR&ED is set to take the stage as an economic superstar for the country.
SR&ED MOMENTUM IN CANADA
Although a federal program dedicated to increasing SR&ED has existed in some form since the early 1960s, the official Canadian mandate to support groundbreaking work has expanded dramatically over the last five years. It now includes more generous SR&ED tax incentives, cash credits and financial support for cutting edge organizations, both established and entrepreneurial alike.
This shift is a palpable one, already delivering stand-out projects like Toronto’s incubator juggernaut MaRS Discovery District and Waterloo’s Miovision, a tech export company that credits its soaring startup success to SR&ED funding from the Canadian government.
Canada is poised to become a formidable leader in global markets for SR&ED; one that truly embraces steep competition and aggressive growth to improve industry products and processes, particularly those fuelled by digital and technical expertise. Given the increasingly interdisciplinary scope of SR&ED, the range of projects eligible for financial support has expanded as well.
What some hopeful economists once thought of as an emerging or futuristic resource for Canadian businesses is now boosting progress and profits in the present – to the tune of approximately $4 billion annually in versatile tax credits that benefit 18,000 claimants.
THE TOP THREE WAYS SR&ED ADDS VALUE
Rewards of the SR&ED tax incentive program are high because it directly impacts the commercial viability (and reach) of national innovators and Canadian businesses. But SR&ED funding is also creating a macro-level economic boost and contributing to the quality of public life. Here’s how:
1. Attracting bright young talent
Many of the companies who make the Canada’s Top Employers for Young People list are using SR&ED initiatives to appeal to millennials and build a highly qualified next generation workforce that embraces technology and digital disruption. Almost all of Canadian Forbes’ Top 30 Under 30are driving change in diverse SR&ED verticals, too.
2. Kick starting the economy
Canadian Business published a feature exploring the top tactics to make Canada’s economy roar. It’s no coincidence that many of those recommendations rely on SR&ED: from hiring a Chief Innovation Officer and teaching entrepreneurial skills to crowning Toronto a global startup capital, ensuring SR&ED investment is a policy priority and harnessing the power of big data in the private sector.
3. Supporting small businesses and startup culture
Small businesses are an enduring cornerstone of the Canadian economy; they also double as a key recipient group that consistently delivers sustainable, targeted SR&ED growth and value alignment. Digital startups and seasoned SMEs account for almost 75 per cent of participating organizations in the Canada Revenue Agency SR&ED program.
This same category of organizations is much more likely to capitalize on unique provincial partnership opportunities for SR&ED as well, like the #BCTECH Summit, which is dedicated to building a vibrant regional tech and experimental development scene on the west coast.