New White Paper Series: SR&ED for the Energy industry

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We’re starting a new 5-part series of White Papers on the topic of SR&ED for companies in the Energy industry.

We aim to dispel misconceptions about SR&ED and offer special considerations for fully leveraging the program. We want every E&P and service company to leave no stone unturned for cost-saving measures in today’s economy.

TSGI has been servicing the Canadian Oil and Gas industry for 20+ years, including work with our partners on major technological breakthroughs that have transformed the industry.

White Paper 1: Debunking the myth: SR&ED Eligibility for E&P Companies (Click to open)

 

Check back for future installments in our series:

White Paper 2:  Scoping the opportunity: Claiming SR&ED in a capital-intense industry  (Upcoming)

White Paper 3:  Special considerations for Oil and Gas Service companies (Upcoming)

White Paper 4:  SR&ED in a JV world: Crucial insights for Energy companies entering a JV (Upcoming)

White Paper 5:  Geophysics, Reservoir Evaluation, and capturing your SR&ED entitlement (Upcoming)

Emissions Reduction Alberta (ERA) announces ~$30M project funding

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Emissions Reduction Alberta (ERA) announced approx. $30M in project funding for 12 projects aimed at reducing methane through technological advancement, as part of the Province’s objective to reduce methane emissions by 45% by 2025.

The projects are part of ERA’s Methane Challenge, focusing on opportunities in Alberta’s oil and gas industry (five projects), methane detection and quantification (five projects), and biological sources of methane (two projects).

The winning projects include a remote generator compressor system (Gentherm Global Power Technologies), an in-pipe turbine generator to off-set the need for pneumatic instrumentation (ZKO Oilfield Industries and Peyto), a cattle feed ingredient to reduce methane emissions at their source (Viresco and DSM) and biomass generation to displace coal (Capital Power Corporation). Eight other projects were announced (details here).

In total, the project funding will result in $83M total investment with industry contributions.

The main sources for methane emissions in Alberta are associated with agriculture, mining, oil and gas and waste management. The climate change impact of methane is approximately 25 times greater than CO2 over a 100-year timeframe.

Industry partners tackling technological advancements can potentially offset some of their costs through the SR&ED program. For SR&ED projects in Alberta, 10% of eligible costs can be recouped as a cash refund (up to $400K), in addition to Federal Investment Tax Credits.

For more information or a complimentary SR&ED eligibility assessment, contact Elliot Cudmore (elliot.cudmore@tsgi.ca, 403-451-3384).

Feds expand scope of innovation funding

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Federal funds ($1.26B) intended to stimulate research and development in Canada will be more broadly applicable for companies operating outside the initial six high-tech sectors outlined in prior budget announcements.

The initial industries of focus were: advanced manufacturing, agri-food, clean technology, digital industries, health and bio-sciences and clean resources, as well as infrastructure and transportation.

Widening the scope of the $1.26B fund for innovation support will be beneficial for companies focused in industries excluded from the initial announcement. However, critics may argue that dispersing funds without strategic focus will not achieve the objectives of the Feds’ targeted SuperCluster initiative.

Economic Development Minister Navdeep Bains will provide further details shortly.

 

Alberta Innovation Trending Upwards

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Several bright spots emerged in the past week suggesting an upward trend for future innovation in Alberta. Indeed, recent major announcements from all three “pillars” of R&D in Canada (Private sector, Government, and Academia) bode well for innovation and technology advancement as mainstays in Alberta’s evolving economy.


1. Last week, Mayor Nenshi announced that a new Calgary Campus will be opened by Rocketspace, a prestigious accelerator from Silicon Valley. Occupying 75,000 sq ft of the former Encana Place, Rocketspace will help a selection of Canada’s top technology ventures scale rapidly. Combined with other local accelerator programs (e.g. Imaginea Energy’s accelerator, GE’s Customer Innovation Center), Rocketspace’s arrival in Calgary suggests there is ample opportunity for innovation and growth in Alberta. Indeed, industry pressures on cost competitiveness, efficiency and environmental performance are driving unprecedented technological innovation and opportunities for new business.

  1. 2. The Federal government opened applications on their business-led “Innovation Superclusters Initiative.” Industry-led consortia are invited to apply to “supercharge their regional innovation ecosystems.” The Federal government will provide dollar-for-dollar matching of private sector investment. Superclusters produce technology innovation stemming from a critical mass of diverse private sector organizations, academic and research institutions, and other innovation partners. The Supercluster Initiative will favour consortia which distribute access to the generated intellectual property (IP). Apply for the Supercluster program by July 21st, 2017.
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    3. On May 31st, the Hunter family established the Hunter Hub for Entrepreneurial Thinking with an extraordinary $40M donation. In the words of Diana Hunter, “As one of Canada’s leading research institutions, the University of Calgary is a driver of the entrepreneurial and innovation ecosystem in our community. It fuels our next generation of talented social and technological thinkers, who will in turn energize our city, our province and our world for the future.” Initiatives such as the new Hunter Hub strengthen academia and the private sector as drivers of continued Canadian R&D.


Of course, the companies that will benefit most from these initiatives are the same companies that will benefit from SR&ED, Canada’s largest source of financial support for R&D in a commercial setting.  These days, any company pursuing technology development needs to have a solid SR&ED strategy in place to remain competitive, and TSGI has successfully guided hundreds of companies in this regard over our 20+ year history. Contact Elliot.Cudmore@tsgi.ca for a complementary consultation for SR&ED eligibility.

We’re growing! TSGI welcomes two new additions to our team

By | General, SR&ED | No Comments

TSGI is pleased to welcome Igor Koracin and Jordan Boyé to our growing SR&ED Services division.

Igor Koracin is our newest Technology Advisor. Igor has a Masters in Petroleum Engineering and a track-record of driving technical projects in SAGD facilities. A strong communicator and analytical mind, Igor will complement the skill-sets and specialties of his fellow Technology Advisors.

We’re also pleased to welcome Jordan Boyé as our newest Tax and Financial Advisor. Jordan is a CPA, CA with a diverse background of accounting across different technology and sector areas. He also brings a strong passion for the arts. His tax expertise and client-facing rapport will bring tremendous value to our team of Tax and Financial Advisors.

Welcome Igor and Jordan!

Federal Budget 2017 offers focus on Innovation and Clean Technology

By | General, SR&ED | No Comments

The Liberal government delivered the 2017 budget yesterday, with a focus on initiatives related to innovation and clean technology. One major feature is the creation of Innovation Canada (ear-marked up to $950M over five years to stimulate innovation hubs or “Superclusters”).

On the SR&ED program specifically, there does not appear to be any significant changes at this time. The government plans to undertake a “whole-of-government review” of business innovation programs, within which the government will review the SR&ED program “to ensure its continued effectiveness and efficiency.” No timelines or indications of how this will be assess were provided.

The Innovation and Skills Plan will focus on growth in six technology-centric sectors: advanced manufacturing, agri-food, clean technology, digital industries, health and bio-sciences and clean resources, as well as infrastructure and transportation. Superclusters (strong relationships between the private sector, post-secondary and research institutions) are envisioned to drive R&D for “commercial outcomes with application in the real economy.”

Various allocations were announced to develop clean technologies across multiple streams (including: Clean Growth Hub, multiple government departments, the Sustainable Development Technology Fund, and $570M over three years to provide working capital for clean tech firms).

For more information, please see the Budget, including page 43 for an overview of the Innovation and Skills Plan and page 95 for details on “Canada’s Innovation Economy: Clean Technology, Digital Industries and Agri-Food.”

TSGI launches new website!

By | General, SR&ED, Transaction Services | No Comments
Welcome to our new website! Take a few minutes to explore our new platform.

 

We’re pleased to highlight new features, including:
  • delivering a more user-friendly experience on all devices
  • highlighting the technical strength and diversity of our Technology and Financial SR&ED teams
  • introducing Transaction Services
As always, feel free to reach out to us with any inquiries, or email info@tsgi.ca

 

Happy browsing!

TSGI welcomes Jacqueline Marques, Tax and Financial Advisor

By | SR&ED | No Comments

TSGI is delighted to welcome on board Jacqueline Marques, CPA, CGA, MA, BA to our team of SR&ED Tax and Financial Advisors. Jacqueline brings over ten years of diverse experience in accounting, tax and technology.

Jacqueline has worked in a variety of industries applying  her skills, including software and hardware development, manufacturing, property development, commodities trading and agriculture. She is well practiced in accounting for both SMEs and large corporations.  She has a strong foundation of research skills and technical writing in addition to her financial knowledge and has a passion for tax research and lifelong learning. Jacqueline is a top performer in her field and we are excited to have her join our team!

Alberta announces Investor Tax Credit

By | General, SR&ED | No Comments

Beginning in 2017, the Alberta government’s “Alberta Investor Tax Credit (AITC)” will attempt to stimulate investment in technology-related small and medium-sized Albertan businesses. The announcement comes as the Province seeks to diversify Alberta’s economy from a traditional focus on oil and gas. The AITC offers a 30 percent tax credit over two years for venture capital investors in IT, clean tech, health technology, gaming, visual effects and digital animation. Program details will be announced soon, with an overview available at this link.

Key take-aways

  • Unlike SR&ED, the program is budget limited, and awarded on a “first-come, first-served basis”
  • Limited to Alberta investors who pay taxes in Alberta
  • Province does not pick winners/losers and will not complete due diligence for investors
  • Stakeholder process is now open, while details on program design and implementation are pending

Pre-Claim Consultation or Pre-Claim Review: What’s the Difference?

By | SR&ED | No Comments

Both programs are recent additions to the discretionary services provided by CRA to assist applicants with their SR&ED claims. The main objective is to reduce the uncertainty of your SR&ED filing outcome.

While one program (PCC) is less rigorous, it provides educational benefits to new SR&ED applicants on the CRA’s eligibility tests for SR&ED work. Participants receive advice and recommendations for future claims, and a basic assessment as to whether or not their claim contains SR&ED work. However, the CRA’s PCC decision is non-binding and does not establish the extent of SR&ED work or expenditures in a given project.

The more rigorous service (PCR) is similar to a regular review, however it can capture benefits as the review is done “when the work is taking place, while information and people are more readily available.” To participate, applicants must meet several requirements, including previous participation in the SR&ED program. The program has just been launched in Western Canada, and will extend to all other provinces through November 2016.

Conclusion:

  • PCC informs the claimant as to whether or not SR&ED work exists within the claim, but not the extent of eligible work or allowable expenditures.
  • PCR informs the claimant with certainty as to whether or not SR&ED work exists within the claim, as well as the extent of eligible work or associated expenditures. However, it requires participants to meet specific criteria.

How can TSGI help? Depending on your specific business context, it may be beneficial to explore these new services. Not only can TSGI provide a free assessment, but we can provide guidance about whether or not CRA’s additional services are right for you. Contact us anytime.