Sr&ed And Other Funding Programs

Theres been more talk about the Scientific Research and Experimental Development

(SR&ED) program in the media than a few years ago, as more and more Canadian manufacturers are realizing that there is a government program aimed to help them with new or innovative work that they are doing. This program is a great help during tough economic times. Even now, when our economy is turning around, we are all still looking for ways to make our bottom line a little bit more accessible.

The SR&ED program is offered by the Canadian Revenue Association (CRA), to help Canadian companies who are creating new products/processes or improving existing products/processes. From the federal government, companies can receive up to 57.75% back for eligible labour costs, as well as 35% back for material and subcontract expenses. There is also additional provincial funding available, though the amount varies from province to province, which companies who are claiming for the SR&ED program would receive.

While there is more talk of the SR&ED program in the media, it isnt always clear how you can take advantage of this program if you are already getting some other form of government funding for your work. This can lead to confusion, and can cause some companies to believe that either they are not applicable or that its too much hassle to attempt claiming for more than one government funding program.

The good news is, that even if you are already receive some other form of government funding, you are most likely still eligible for the SR&ED program as long as the expenditures you are claiming for have not already received funding. For example, if you receive funding to purchase new equipment through another funding program, the equipment that you purchased could not be included in your SR&ED claim. Many sources of funding focus on different aspects of your business in relation to the funding, which is why you would be able to receiving funding for new equipment as well as still be applicable for the SR&ED program.

Even in the cases where you are looking at funding programs that would cover the same work (such as with NRC-IRAP and the SR&ED program), you can still claim for both - as long as long as the expenditures for both funding programs do not cover the same expenditures. For example, when getting funding through NRC-IRAP, a company could get funding for 50% of their project up-front the remainder of this project would have to be paid by company funds while the project is underway. Afterwards, the remaining 50% that the company paid for, this portion would be applicable for the SR&ED program.

So, the question now is, why arent companies taking full advantage of the SR&ED program along with the other funding programs they are already working with?

by: Courtney Wilson

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