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Analysis: Trends in CRA Reports to Parliament Regarding SR&ED

Canadian Parliament by Saffron Blaze

The Canadian Parliament in Ottawa. Photo by Saffron Blaze, via http://www.mackenzie.co licensed under CC BY-SA 3.0.

The Canada Revenue Agency (CRA) is “responsible for administering, assessing, and collecting hundreds of billions of dollars in tax revenues annually. The money the CRA collects is used by federal, provincial, territorial and First Nations governments to fund important social programs, provide essential services, and build and maintain the infrastructure needed for continued economic prosperity. The CRA also directly delivers billions of dollars in benefits and tax credits that contribute to the well–being of Canadian families, children, seniors, and persons with disabilities.”1

Prior to 2015, the CRA was required to provide an annual report to the Treasury Board of Canada that outlined their income, expenditures, program improvements, and other details regarding the organization. Departmental Performance Reports replaced the CRA Annual Report to Parliament after the final, 2014 Annual Report was published.2

Contents

Summary Table

Click on the year to be taken to the detailed summary.

Fiscal Year Start (May 1)Fiscal Year End (April 30)Refund ($B)Difference ($B)*Difference (%)*# of ApplicantsRefund Average per Applicant*
20052006$1.8
20062007$3.0$1.266.7%18,000$166,666.67
20072008$4.0$1.033.3%18,000$222,222.22
20082009$4.0($0)(0%)18,000$222,222.22
20092010$3.3($0.7)(17.5%)21,000$157,142.86
20102011$3.5$0.26.1%21,000$166,666.67
20112012$3.6$0.12.9%23,000$156,521.74
20122013$3.6($0)(0%)28,140$127,931.77
20132014$3.3($0.3) (8.3%)24,794$133,096.72
20142015$3.1($0.2 )(6.1%)24,302$127,561. 52

The CRA’s Annual Reports to Parliament: Detailed Reports

In the following section, we’ve compiled excerpts from the CRA’s Annual Reports to Parliament relevant to the SR&ED program. Sources are included at the beginning of each section.

2014-2015

Source: 2014-2015 CRA Annual Report To Parliament–SR&ED Section

Scientific Research and Experimental Development

The Scientific Research and Experimental Development (SR&ED) program provides tax assistance and investment tax credits to Canadian businesses as an incentive to conduct qualifying industrial research and development activities in Canada. The CRA’s role is to make sure all claims under these programs are made in accordance with legislative requirements.

To reduce the administrative burden on companies making SR&ED claims, we continued our feasibility study of a formal pre-approval process for those claims. The study includes a three-year pilot project with businesses across Canada. The CRA worked to increase awareness of the SR&ED program in 2014-2015 through outreach and stakeholder engagement activities including the following:

  • We posted four videos on the CRA’s YouTube channel, focusing on an overview of the SR&ED program, what type of work and expenditures qualify for the SR&ED tax incentives, how to calculate the SR&ED investment tax credit, and how to file a claim.
  • We piloted webinars featuring current information and an explanation of the SR&ED program. The pilot was a success and, due to the positive feedback and overwhelming demand from participants, the CRA began providing these webinars on an on-going basis on April 1, 2015.
  • We collaborated with other government departments, such as the Canadian Intellectual Property Office, Department of Foreign Affairs, Trade and Development, Export Development Canada, and National Research Council – Concierge Service, on cross-promotional opportunities for the SR&ED program.
  • We partnered with the Chartered Professional Accountants of Canada and the Association de planification fiscale et financière to coordinate two symposiums to promote and discuss the SR&ED program.
  • We continued to engage tax preparers and industry associations to address emerging issues related to the program.

Each year, the Agency processes over 24,000 SR&ED claims

Key results

  • The SR&ED program processed 24,302 claims.
  • The program provided more than $3.1 billion in tax assistance in support of industrial research and development.
  • The CRA identified over $394 million in non-compliance.

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2013-2014
Source: 2013-2014 CRA Annual Report to Parliament

Scientific research and experimental development

Scientific research and experimental development Financial resources
(in dollars)
Human resources
(FTEs)
Planned 72,020,710 599
Actual 74,360,370 617
Difference (2,339,660) (18)

The Scientific Research and Experimental Development (SR&ED) program provides tax assistance and investment tax credits to Canadian businesses as an incentive to conduct qualifying industrial research and development activities in Canada. The CRA also administers film and media tax credits. The CRA’s role is to ensure all claims under these programs are made in accordance with legislative requirements.

We review the technical and financial aspects of all claims submitted to ensure the work and expenditures claimed meet the specific requirements of the Income Tax Act. We also focus on identifying high-risk claims and ensure the program operates as intended.

Because the scientific research and experimental development tax credit is the largest single source of federal government support for industrial R&D in Canada, we work hard to give applicants the information and timely access to services they need. Our goal is to make sure tax credits or cash refunds are delivered quickly, consistently, and predictably.

In 2013-2014:

  • In January 2014, the SR&ED program launched the self-assessment learning tool. This online tool helps businesses determine if their R&D work meets the requirements for the SR&ED program. It includes focused questions, clear explanations, and tips on how to structure an SR&ED claim.
  • The CRA introduced the First-Time Claimant Advisory Service. This service provides in-person help for first-time SR&ED claimants. Local CRA staff meet with first-time claimants at their place of business to help them to better understand the SR&ED program and to give them the tailored information they need for a successful claim.
  • In January 2014, we began piloting webinars on the SR&ED program. These webinars are designed to complement the in-person seminars currently held across the country.

These new initiatives are designed to help SR&ED claimants successfully access the SR&ED program and benefit from the incentives it offers. By proactively supporting our clients and helping them become better informed, we are increasing their chances of a successful claim, reducing the time lost through processing delays, and lowering their administrative burden. This additional support is expected to give SR&ED claimants more opportunities to create jobs and grow Canada’s economy.

Key results:

  • The SR&ED program processed 24,794 claims.
  • The program provided more than $3.3 billion in tax assistance in support of industrial research and development.
  • The CRA identified over $534 million in non-compliance.

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2012-2013
Source: 2012-2013 CRA Annual Report to Parliament

[scientific research and experimental development]

The Scientific Research and Experimental Development (SR&ED) Program is an important federal tax incentive program administered by the CRA. It provides support to Canadian businesses to encourage research and development (R&D) in Canada. The SR&ED Program offers claimants tax incentives in the form of income tax deductions and investment tax credits based on their expenditures like wages, materials, and machinery on eligible SR&ED work done in Canada.

The Income Tax Act provides a definition of scientific research and experimental development and describes eligible SR&ED work and expenditures. We give information and services to help businesses determine if their R&D work and expenditures are eligible for these tax incentives.

We review the technical and financial aspects of all SR&ED claims. This is an important check to ensure that the program operates as intended and that SR&ED work and expenditures meet the specific requirements defined in theIncome Tax Act. Our focus is on identifying high-risk claims and using a more tailored strategy to address key areas of concern.

In 2012-2013, the CRA started work on a number of initiatives to improve the predictability and the accessibility of the SR&ED Program.

  • The CRA released new, consolidated SR&ED policy documents and reorganized its SR&ED Web page content to present information in a more user-friendly way. The goal of this initiative was to make compliance easier by clarifying and simplifying SR&ED policies.
  • The CRA is improving its self-assessment and learning tool, which is designed to assist businesses in determining the eligibility of their R&D work for SR&ED tax incentives. We expect to release this updated tool in 2013-2014.
  • The CRA launched a pilot project to establish the feasibility of a formal pre-approval process (FPAP) for SR&EDclaims. The FPAP will provide better certainty to businesses on the eligibility of their SR&ED claims before filing. During the pilot, the CRA will be working with a number of businesses to receive feedback on FPAP.
  • We increased our engagement with stakeholders by meeting with industry representatives to discuss and address emerging SR&ED program issues. These discussions will continue to be held regularly.

Our results indicate that more businesses are receiving tax assistance over time. In addition, we continued to meet our performance targets for our four service standards for the processing of SR&ED claims and requests.

Key results:

  • The CRA provided more than $3.6 billion in tax assistance in support of industrial research and development
  • The CRA processed 28,140 claims, compared to 28,993 in 2011-2012
  • The CRA provided tax assistance to over 23,000 claimants through the SR&ED Program, an increase of 27% over the number of claimants who received tax assistance five years ago
  • The CRA processed 96% of SR&ED refundable and non-refundable claims within 120 days and 365 days respectively, well above our target of 90%
  • The CRA identified $404 million in non-compliance, compared to $424 million in 2011-2012

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2011-2012
Source: 2011-2012 CRA Annual Report to Parliament

scientific research and experimental development

In 2011, our Scientific Research and Experimental Development (SR&ED) program provided more than $3.6 billion in tax assistance to over 23,000 claimants, an increase of $100 million over the previous year. We also ensure that businesses prepare their claims in compliance with tax laws, policies, and procedures. As a result of those efforts, we identified and addressed $425 million of non‑compliance last year.

During 2011-2012, we continued to consolidate and clarify our current SR&ED policy documents and related guidance to help claimants better understand how the program works. Online public consultations ended in February 2012 and we expect to report the results in our 2012-2013 Annual Report to Parliament.

In October 2011, the Research and Development Review Expert Panel released its report to the Government of Canada on its review of federal support for research and development. The panel noted that the SR&ED program plays a fundamental role in lowering the costs of industrial Research and Development (R&D) for businesses, enhancing investment in R&D, and making Canada a more attractive place to locate R&D. The panel also provided recommendations to the Government of Canada on how to improve support for businesses and help them grow into larger, globally competitive companies. In the 2012 Federal Budget, informed by the advice of the Research and Development Review Expert Panel, the Government of Canada announced a number of legislative measures to simplify the SR&ED program and make it more cost‑effective, and administrative measures to enhance the predictability of the program. Over the next few years, the CRA will be implementing these measures.

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2010-2011
Source: 2010-2011 CRA Annual Report to Parliament

Scientific research and experimental development program

The CRA oversees the integrity of various tax incentives that promote economic growth in Canada, such as the Scientific Research and Experimental Development (SR&ED) program. The SR&ED program is the largest single source of federal government support for industrial research and development. The CRA strives to deliver the tax incentives in a timely, consistent, and predictable manner, while ensuring businesses prepare their claims in compliance with tax laws, policies and procedures.

During 2010-2011, the SR&ED program provided about $3.5 billion in tax assistance to over 21,000 claimants. In addition, as a result of our risk assessment process, in 2010-2011, we identified and addressed $473 million of non‑compliance, an increase of 5.6% from the previous period.

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2009-2010
Source: 2009-2010 CRA Annual Report to Parliament

Scientific Research and Experimental Development Program

In the 2008 federal budget, the CRA committed to enhancing the quality assurance methodology of the Scientific Research and Experimental Development (SR&ED) program. In 2008-2009, we consulted with stakeholders and, in turn, developed a national SR&ED quality assurance framework. This framework will help ensure SR&ED claims and decisions are appropriate and consistent with CRA policies and the governing legislation across the country. Based on this framework, the SR&ED Quality Assurance Operations manual and the requisite tools were developed in 2009-2010.

In the 2008 Federal Budget, the CRA also committed to reviewing the SR&ED policies and procedures. In 2009-2010, we analyzed, organized, and clarified all SR&ED policy information. Over the next two years, the SR&ED program will be conducting online consultations to get the public’s feedback on the new policy documents.

In 2009, Canada’s SR&ED program provided about $3.3 billion in assistance to over 21,000 claimants.

In 2009-2010, we expanded the filing capabilities of the CRA’s Corporation Internet Filing service to allow eligible corporations to file their SR&ED claims, with their income tax returns, using the internet.

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2008-2009
Source: 2008-2009 CRA Annual Report to Parliament

Scientific Research and Experimental Development

To strengthen service delivery, we focused on increasing accessibility to, and the efficiency of, the Scientific Research and Experimental Development (SR&ED) tax incentive program. In 2008, Canada’s SR&ED program provided about $4 billion in tax assistance to over 18,000 claimants.

During 2008-2009, we made it easier for businesses to apply for this tax incentive by publishing a simplified claim form and associated guide, as well as a new CD-ROM, brochure and leaflet. In addition, we developed a Web-based SR&ED Eligibility Self-Assessment Tool (ESAT) to help claimants identify whether their research and development projects may qualify under the program. Statistics on Web visits to our SR&ED home page indicate that awareness of the SR&ED program has increased, which we attribute, in part, to the release of these new products.

Priority: Enhance our administration of the scientific research and experimental development (SR&ED) tax credit

Achievements: In 2008-2009, we:

  • redesigned our SR&ED Web pages;
  • produced a CD-ROM that gives an overview of the SR&ED program and acts as a portal to our SR&ED Web pages; and
  • published a new brochure and leaflet that provides a one-stop source of information on SR&ED.

For more information on the CRA’s administration of this federal incentive program please refer to www.cra.gc.ca/sred.

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2007-2008
Source: 2007-2008 CRA Annual Report to Parliament

Scientific Research and Experimental Development Program – This program provides more than $4 billion in tax credits to almost 18,000 claimants.

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2006-2007
Source: 2006-2007 CRA Annual Report to Parliament

Annually, the Scientific Research and Experimental Development (SR&ED) tax incentive program provides more than $3.0 billion in tax credits to over 18,000 claimants as an incentive to conduct qualifying industrial research and development activities in Canada. A prompt and thorough review of the applications for these tax credits demonstrates the CRA’s commitment to effective administration of the related programs and fosters reporting compliance. In 2006-2007, we met all of our external service standards in the SR&ED and Film and Video tax credit programs. A complete list of these, with our performance compared to targets, is on .

  • Scientific Research and Experimental Development Program – This program annually provides more than $3.0 billion in tax credits to over 18,000 claimants.

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2005-2006
Source: 2005-2006 CRA Annual Report to Parliament

Scientific Research and Experimental Development Program (SR&ED) – provides investment credits as an incentive to conduct qualifying industrial research and development activities in Canada:

  • spending of $52.7 million (520 FTEs); and
  • provided $1.8 billion in tax credits.

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Analysis: Trends in CRA Reports to Parliament Regarding SR&ED

We reviewed 10 years’ worth the annual reports submitted by the Canada Revenue Agency (CRA) to the Treasury Board of Canada. Buried in these reports are details of Scientific Research & Experimental Development (SR&ED) and, more importantly, hints as to how the program is perceived. In this article, we identify several reporting trends that we believe are worth noting.

Background

As outlined in the introduction of the most recent Annual Report to Parliament (2014-2015), the Canada Revenue Agency (CRA) is “responsible for administering, assessing, and collecting hundreds of billions of dollars in tax revenues annually. The money the CRA collects is used by federal, provincial, territorial and First Nations governments to fund important social programs, provide essential services, and build and maintain the infrastructure needed for continued economic prosperity. The CRA also directly delivers billions of dollars in benefits and tax credits that contribute to the well–being of Canadian families, children, seniors, and persons with disabilities.”

On an annual basis, they are required to provide a report to the Treasury Board of Canada that outlines their income, expenditures, program improvements, and other details regarding the organization. We combed through 10 years of reports to see what the CRA reported regarding the SR&ED tax incentive program. As a result of this effort, we were able to put together the following table:

Fiscal Year Start (May 1)Fiscal Year End (April 30)Refund ($B)Difference ($B)*Difference (%)*# of ApplicantsRefund Average per Applicant*
20052006$1.8
20062007$3.0$1.266.7%18,000$166,666.67
20072008$4.0$1.033.3%18,000$222,222.22
20082009$4.0($0)(0%)18,000$222,222.22
20092010$3.3($0.7)(17.5%)21,000$157,142.86
20102011$3.5$0.26.1%21,000$166,666.67
20112012$3.6$0.12.9%23,000$156,521.74
20122013$3.6($0)(0%)28,140$127,931.77
20132014$3.3($0.3) (8.3%)24,794$133,096.72
20142015$3.1($0.2 )(6.1%)24,302$127,561. 52

*Calculations done by us.

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Analysis of SR&ED Reporting

SR&ED Funding Amounts

We noticed interesting trends regarding the disbursement amounts. First, the program refund amount increased most years prior to the Fiscal Year (FY) 2013 (April 1, 2012 – March 31, 2013). If this trend continued, the amount paid out in FY 2015 (April 1, 2014 – March 31, 2015) would have been $4.2 billion; however, this is not the case.

Starting in FY 2014 (April 1, 2013 – March 31, 2014) the amount of CRA tax assistance for SR&ED began steadily decreasing. Thus, the program saw a decrease from $3.6 billion down to $3.3 billion (an 8.3% decrease) in 2014 and a further decrease of $200 million (a 6.1% decrease) the following year.

Several changes announced in the 2012 federal budget likely contributed to this reduction. These changes included:

  • January 1, 2013: Contract Payments reduced to 80% of the paid value.
  • January 1, 2013: Proxy overhead calculations reduced to 60% from 65%
  • January 1, 2014: Proxy overhead calculations reduced to 55% from 60%
  • January 1, 2014: General SR&ED refundable credit reduced to 15% from 20%.
  • 2014: All capital expenditures incurred during the 2014 fiscal period will not be eligible for SR&ED.

Number of SR&ED Applicants

In FY 2013-2014, the year with the program’s most recent changes, the number of total applicants decreased dramatically. This coincides with some other major program changes that were implemented in the 2012 and 2013 federal budgets.

2012 Federal Budget

Improvements include:

  • Increasing the number of technical reviewers.
  • Providing additional training and establishing coordinated technical support for the technical reviewers
  • Devoting more time to program services.
  • Enhancing the quality assurance methodology
  • Reviewing dispute resolution procedures to ensure their effectiveness.

In addition, the CRA consolidated and clarified the administrative policies that are currently contained in about 70 documents pertaining to the SR&ED tax incentive program. The revised information was presented in a more user-friendly format on the CRA website in December 2012, with the objective of reducing complexity and improving accessibility.

2013 Federal Budget

The Canada Revenue Agency will also receive new funding of $15 million over two years to focus more resources on reviews of SR&ED program claims where the risk of non-compliance is perceived to be high and eligibility for the SR&ED program unlikely. The Canada Revenue Agency will also more frequently apply penalties for false statements or omissions, where appropriate. In addition, in order to enable better risk assessment, SR&ED program claim forms will be revised to require more detailed information. To enforce this new requirement, Economic Action Plan 2013 proposes that a new penalty be applied in instances where the new required information is missing, incomplete, or inaccurate.

This has meant an increase in reviews, which (anecdotally) have not always been a positive experience for the taxpayers. As such, there have been rumours of many smaller applicants ceasing to apply for the tax credit.

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Other Items – SR&ED “Non-Compliance” Reporting & Staffing

Non-Compliance

CRA reports began including the amount recovered due to “non-compliance” in the past few years, such as:

“The CRA identified over $394 million in non-compliance.” – 2014-2015

“The CRA identified over $534 million in non-compliance.” – 2013-2014

“The CRA identified $404 million in non-compliance, compared to $424 million in 2011-2012.” – 2012-2013

Staffing

The CRA reports started including their amount of financial resources. According to the 2013-2014 Annual Report to Parliament, the financial resources in dollars went beyond $74 million and the number of employees exceeded 600. This is the only year that they reported on the specific amount of resources at their disposal in relation to the SR&ED program.

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What do these trends in CRA SR&ED reports suggest?

We find it interesting that the CRA reports have shifted to more precise reporting, with expenses and the amount of money saved each year being highlighted, as opposed to a focus on the amount of assistance offered. This reads as though the program is being forced to justify itself to other departments (specifically, the purse keepers at the Treasury Board) and showcase that that investment in new personnel and programs is a worthwhile endeavour.

Does this mean the program is at risk? It’s hard to say, when the government is occasionally swayed by sensationalist reporting in the news rather than academic research. That said, the most recent significant overhaul was less than five years ago (2012) and, if the downward trend in disbursements continue, the program will be halved by 2020 without any intervention (reaching a low of $1.9 billion, only $100 million more than the program offered in the FY 2006).

Fiscal Year StartFiscal year End Refund ($ in billions)Difference ($ in billions)*Difference (%)*
20122013$3.6
20132014$3.3($0.3)(8.3%)
20142015$3.1($0.2)(6.1%)
20152016$2.9($0.2)(7.2%)**
20162017$2.7($0.2)(7.2%)
20172018$2.5($0.2)(7.2%)
20182019$2.3($0.2)(7.2%)
20192020$2.1($0.2)(7.2%)
20202021$1.9($0.2)(7.2%)

*Calculations done by us.

**The average of FY2014 / FY2015 decreases.

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Conclusion

For context, in FY2015 the CRA “processed over $469 billion in taxes and duties, and issued almost $22 billion in benefits payments to approximately 12 million recipients.”3 Despite some of the continued complaints about this program, it represents a tax “loss” of only 0.6% ($3.1B out of $469B). There are several academic studies that demonstrate a net benefit to SR&ED, although opinion pieces in national press may have non-academics believing otherwise.

Given that the program was not mentioned in this year’s federal budget, we would hazard a guess that it will be left alone for another few years. Creating a replacement program to keep jobs in Canada would likely cost more (incl. finding new employment for the 600+ SR&ED staff) than work on refining the current program.

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Show 3 footnotes

  1. Government of Canada. (January 25, 2016.) Annual Report to Parliament 2014-2015. Retrieved Accessed: September 6, 2017 from: https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/annual-report-parliament/annual-report-parliament-2014-2015/annual-report-parliament-2014-2015-22.html.
  2. Government of Canada. (November 23, 2016.) Annual Report to Parliament. Retrieved October 16, 2017 from: https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/annual-report-parliament.html.
  3. Canada Revenue Agency. (2015). Annual Report to Parliament. Retrieved September 29, 2016, from http://www.cra-arc.gc.ca/gncy/nnnl/2014-2015/ar-2014-15-eng.pdf.
5 Comments
  1. Thanks a lot for this analysis Elizabeth
    I would say it is normal that refund amounts drop since 2012 due to budget cuts. After 2015, this trend should level off – hopefully, the downward trend will not continue as shown in your second table.
    I’m surprised that the number of applicants hasn’t dropped more, since we’ve seen a number of our clients abandon the program due to the cuts combined with more severe reviews. The statistics show that the number of applicants is still above 2010…this seems odd.
    The refund per applicant – is this before or after review? If they are just showing the numbers claimed without adjusting this to subtract the amounts ‘recovered’ during review…not a good indicator.
    The fact that they are now reporting the ‘amount recovered due to non-compliance’ is quite revealing. Since Jenkin’s report, it has apparently become more important to show that they are effective in finding non-compliance, rather than showing that they are effective in correctly distributing credits intended to encourage SR&ED in Canada.
    I definitely believe the program is at risk, has been since the Jenkins report. We must find a way to reassure the CRA and the public that SR&ED tax credits are crucial to maintaining the competitive advantage of Canadian companies..both large and small. And let’s face it, due to our relatively small population base, it is to be expected that a lot of important SR&ED should be carried out in small to medium-sized companies.
    Here are some statistics I would like to see:
    – a breakdown of applicants by field of technology and company size (sales volume)
    – for each of these applicant groups:
    — amount claimed per year
    — amount reviewed by CRA each year
    — percentage of amount accepted after review (ie. % that meets compliance)
    This would provide a much better picture of whether the CRA is doing a good job at distributing the SR&ED tax credits

    • Hi Thomas,

      Thank you for your insightful comments. I agree with the additional statistics that would help evaluate the efficacy of the program; these may be available with an ATI request. I will make a note of it for my next request from the CRA.

      Three of the columns are our calculations: Difference ($B), Difference (%), Refund Average per Applicant. I have added an asterisk to clarify this point. I believe this is “after review”, but I would have to do an ATI to receive a definitive answer.

      We do need a way to reassure the government that this program is having a beneficial impact. There is so much negative press that is inaccurate – it will be up to those who have seen the benefits first-hand to provide more details on the impact they have seen.

      Please stay tuned as we are currently consolidating the economic research reports about SR&ED. These will no doubt provide more interesting fodder.

      Best,
      Elizabeth

      • Hello Elizabeth,
        Regarding your comment about negative press. There is one thing that I think we should publicize more and I can’t seem to get my hands on it. Perhaps you can help.
        The Jenkin’s report in January 2012 concluded that too much SR&ED credits were going to pay tax preparers, who charged exorbitant contingency fees. In August 2012, the CRA did a consultation regarding contingency fees charged by tax preparers.
        In my recollection, the results of this consultation clearly indicated that, due to healthy competition, the fees paid to tax preparers were not unreasonably high. I’ve searched for published results of this consultation to confirm this but cannot find it.
        I do remember being disappointed that, in spite of the results of this consultation, the CRA still went ahead with the mandatory Part 9 of the T661 form.
        If you could locate the results of this consultation on contingency fees, this information, combined with the fact that Part 9 is in place, could be effectively used to refute recurring negative press regarding the program and SR&ED consultant’s fees.
        It is difficult for us to reassure the public and the government regarding beneficial impacts of the program if they continue with the mindset that we are skimming off huge portions of the credits.
        Best regards,
        Tom

        • Hi Tom,

          I wholeheartedly agree – and I’ve slowly been working on this in the background when time permits. We’re currently working on consolidating all the research under a different section of the website so we can write about two things I believe to be true: (a) that most fees are appropriate, given the complexity of the program and (b) there is a net benefit to SR&ED. I’ll see if we can put something together about these points – because I believe there are conversations happening right now that will affect the budget next year.

          Thank you for your insightful commentary. Once it’s up I’ll send you a note.

          Best,
          Elizabeth

  2. Thank you for a good review.

    There is already a significant confidence gap between software ENGINEERS and CRA. The gap was not there 10-15 years ago.

    Another nontrivial confidence gap is between business people and CRA because the intent of the program not understood by CRA. The program is intended to create technology that leads to products which, in turn, will create high-quality jobs.

    As the reporting requirements and alignment by CRA and the original SRED program intent increases so will the credibility of the SRED Program in the software/data industry.

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