CCI Statement on Scientific Research & Experimental Development Tax Credit Review
January 31, 2024
Today, the Department of Finance announced a process for considering changes to the Scientific Research and Experimental Development Tax Credit, as well as studying the potential for a patent box regime. In response, CCI Director of Federal Affairs Nicholas Schiavo issued the following statement on behalf of our members:
The Scientific Research and Experimental Development tax credit is by far the most important government policy tool for driving innovation in the Canadian economy, incentivizing billions of dollars of private sector R&D each year.
If modernized, SR&ED will drive far more economic activity and growth, which will in turn generate tax revenue to pay for the public services we all value as Canadians. Ensuring that SR&ED is working as intended, and delivering the greatest benefit possible for the Canadian economy is critical.
In terms of reforming the innovation economy to drive greater productivity and wealth creation, adjusting SR&ED eligibility criteria is the most impactful route the government can pursue, and Canadians are likely to feel the effects of a policy change immediately.
CCI has been talking about reforming SR&ED literally since we were founded nine years ago. We have long believed that this tax credit should be adjusted to prioritize Canadian firms and expand eligibility criteria to cover intellectual property costs related to R&D.
The government’s announcement that it will also be exploring a patent box policy as a mechanism for ensuring more intellectual property is generated in Canada and commercialized here is also encouraging news. As we’ve repeatedly said, intangible assets are the most valuable currency in the global innovation economy, and policies that make Canada more competitive are well worth studying.
In the government’s initial documentation about the consultation process, we see plenty of cause for optimism. Canadian innovators are eager to continue sharing their insight with the government and work collaboratively to ensure that SR&ED is an important mechanism for driving greater economic productivity and wealth generation for our shared benefit.
Media Contact: James McLeod email@example.com