To ring in the new year, the key Canadian industry association CATAAlliance (Canadian Advanced Technology Alliance, or CATA) reaffirmed its support for Canadian innovation by calling on the Federal government to bolster existing tax-based innovation incentive programs.
Their release constitutes an update of policy positions. They argue that it is more important to fix systems that are currently in place such as the SR&ED program than it is to remain on the present course of focusing on direct funding such as contributions and grants.
Each year, the SR&ED program currently provides about $3 Billion in tax credits to Canadian businesses. This is down over 25% from a higher watermark of $4.1 Billion that happened from 2008 to 2009. They argue that this is because the program had a wider scope of eligibility at the time. CATA expressed concerns that the ongoing issues with the SR&ED program, combined with misplaced government focus on less effective solutions, hinders the competitiveness of Canadian companies in the global market, whereas returning the focus to SR&ED would provide a better return on investment in the long run.
CATA also called for impartial administration of tax incentive delivery. Programs such as SR&ED are currently administered by the CRA.
