Our President, Ken Cudmore, CA, answers questions posed by the House of Commons Standing Committee on Finance regarding the changes proposed to the SR&ED program in Bill C-45. The proposed changes will severely reduce SR&ED benefits by:
– Reducing the general ITC rate from 20% to 15%
– Removing capital from the eligible expenditure base
– Gradually eroding the proxy overhead rate from 65% to 55%
– Reducing the eligibility of arm’s length and third party contracts (e.g. universities) to 80%
The negative impact of Bill C-45 on Western Canadian companies, particularly large claimants in the Energy Sector, will be dramatic. Our simulations and third party anecdotal reports lead us to believe that corporations will experience a 30%-60% drop in SR&ED investment tax credits.
Ken’s participation as an expert witness to the Committee provides a unique opportunity for Western Canadian firms to have their concerns heard directly by the country’s financial legislators.
Note: TSGI does not maintain this news article after its initial posting. Readers are further advised that the information presented here may not be sufficient for unassisted tax planning. Please contact a TSGI representative if you require clarification or other assistance regarding this topic.