Breaking News: CATA asks CRA for Emergency Aid for Tech Firms
Breaking news: CATA asks CRA for Emergency Aid for Tech Firms. The tech industry is not immune to COVID-19 crisis and challenges it has posed for Canada (and across the globe).
According to an article published April 13, 2020, on ITBusiness.ca “CATA asks PM to assist tech firms with rapid emergency aid“, the Canadian Advanced Technology Alliance (CATA) says the CRA confirmed late last week that it has restarted processing SR&ED claims.
The article described an open letter written to PM Justin Trudeau last week:
CATA proposed a solution to rapidly assist some 12,000 Canadian businesses that conduct research and development through the federal Scientific Research and Experimental Development (SR&ED) funding program. The solution proposed is two-fold: First, accelerate the release of the backlog of $200 million in current SR&ED applications. Second, allocate a *Resilience and Rebound* fund of CA$3.6 billion to provide zero-interest loans (with forgivable portions) for companies that have proven track records. Using tax data from the SR&ED program means firms are pre-qualified and the fund would be administered through Innovation, Science and Economic Development Canada.
There is fear that if no action is taken the technology sector will be crippled and those small and medium-sized companies may disappear altogether. Many tech companies rely on SR&ED investment tax credits to run their business each year. There is also concern that these companies may not be able to access the relief funds as they deal primarily with intellectual property, according to Suzanne Grant, the chief executive officer of CATA.
The article acknowledges that some IT and tech companies dealing with cybersecurity are still doing well during this crisis but others are facing funds being frozen by clients and investors. The halt to cash flow is hurting companies and there is a need for timely government assistance.
Grant stated that many companies are worried if relief does not come quickly they will be forced to close.
“The world is very chaotic right now and the initiatives that the government is putting through are applauded. At the same time, we don’t want to lose some of our critical strategic assets, the investment in innovation,” Grant said. “Tech companies really need to be supported because they can lead us out and get our economy going at the end of COVID. But they need to be supported for the next 12 months at least.”
We here at the SR&ED Education and Resources will continue to monitor the situation and provide updates on SR&ED and COVID-19 as soon as we can.