SR&ED Overview

The Government of Canada is building on its tradition of excellence through the SR&ED program. By investing in research and development, we are creating a stronger economy, future job opportunities, and a better quality of life for all Canadians.

The SR&ED program 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 represents approximately 4 billion dollars distributed annually to over 18,000 Canadian businesses.

“Our Government understands the importance of research and innovation to our country’s present and future economic prosperity. By offering generous investment tax credits, we are encouraging Canadian corporations to invest in innovation and to develop new products, services, and technologies,” said minister Jean-Pierre Blackburn in Hamilton, Ontario on January 13 of 2010.

Maxim Strategy Consulting is aligning itself to the objectives of the Government, the Tax Payer and more specifically the SR&ED program.

SME’s (Small and medium enterprises)

One of the objectives of the SR&ED tax incentive is to encourage the performance of SR&ED by small to medium size businesses.

• Small to medium size businesses are operations focused.
• Not enough time, resources, or infrastructure to structure SR&ED projects effectively.
• This in turn is counter effective in the ability to allocate resources toward SR&ED structure focused initiatives due to the lack of cash flow that they should be able to expect from SR&ED.

The essence of Scientific Research & Experimental Development

The following is our interpretation and opinion of the SR&ED program, its purpose/direction, and some relevant issues.

• SR&ED is a forward thinking mechanism that promotes wherever applicable, the idea of including innovation as a core component of one's business objectives. It is rational to realize that innovation is necessary to ensure long term survival, where innovation is possible.  This is true both on a macro and micro level because the innovator will eventually and ultimately outdate a technology that isn't being improved upon.
• Small to medium size enterprises (SME's) can understandably be operations focused, and normally do not have the resources to structure an SR&ED project effectively, much less accurately report or administer the act of performing research and development work. Although they may be experts in their industries trying to grasp SR&ED can be overwhelming when resources are already limited.