Research And Development?
There has been a great deal of talk about how Canadian companies are falling behind companies from other countries when it comes to the marketing of our innovations, for the past two years. In February 2010, the Conference Board of Canada gave Canada a’ D’ for the capacity to turn knowledge into commercialized products and services. This ranked us 14th out of 17 countries.
Since that point in time, many review boards have been formed, many reports have been written, and many debates have been sparked about what can we do to help Canadians bring their products to market. That’s not to point out that there are not companies who already are quite successful in developing innovative products-it just means that in relation to other countries, the majority of Canadian companies do not profit as much from the sales of innovative products onto the market.
And There’s More!
What Canadian companies do have to their benefit, and which can serve to help us create more innovative products, is among the most generous programs that supports the formation and development of innovative products-the federal Scientific Research and Experimental Development (SR&ED) program.
Each year, through this program the Canadian federal government provides an average over $3 billion to Canadian companies who’re creating new products, modifying existing products, creating new fabrication processes, or developing their own software. As easy and straightforward as it sounds, the CRA estimates that about 50% of companies that are eligible for the SR&ED program don’t actually apply for it. In most cases, this is because many Canadian business owners don’t realize that what they’re doing fully qualifies as Scientific Research and Experimental Development. So, ask yourself-have you developed a new product? Improved an already existing one? Changed a process? If you have, there is a good probability that you may be missing out on a reimbursement program that could provide your company with some much-needed cash refunds.
They could receive anywhere from a total of 35% through 48% refunds on eligible costs when both federal and provincial programs are taken into consideration depending on where a business is located. This money can then be reinvested in these companies to help build more innovation.
By creating new products, by modifying older products, and by developing new processes, we can act at becoming a more innovative nation. The SR&ED program is a very important key to helping companies have the funds necessary to continue with innovative work that Canadian companies are doing.
Innovation is the ways in which the entrepreneur either creates new wealth producing resources or endows existing resources with enhanced potential for creating wealth. There is need of Product innovation, Process innovation and Organizational innovation.
Sometimes it may be difficult to see that what you’re working on is an SR&ED activity. When you’re working under the same project day after day, and when the development takes a lot of time, you may not realize that you’re increasing your technological or scientific knowledge. It can be essential to have an outside consultant come in and assist you with the process of identifying SR&ED projects, for this reason. Ensuring that you are not missing out on any eligible SR&ED expenditures is one of the primary ways to taking advantage of the SR&ED program.