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Liberty Motor Company Inc. Submission in Response to Joint Finance Canada – Canada Revenue Agency Consultation Improving the Scientific Research and Experimental Development Tax Incentives:
Below are our comments which we permit you to post on your website.
1) Our experience is that the SR&ED claims require quite a bit of work to submit and are very specialized. Therefore we require
the assistance of an outside specialist to file them. The cost of the specialist for filing is approx. 5-10% of the SR&ED amount claimed. Effectively this means that our company pays twice as much for filing a SR&ED claim as what the company would pay for non-audited financial statements. We would be interested in solutions to simplify filing the SR&ED claim and reduce its cost.
2) The requirement to do all work in Canada makes sense, when there is more than one supplier in Canada for that type of work.
Our experience is that for certain types of tests there is only one Canadian test facility. Without Canadian competition, the test facility does not have to compete with its U.S. competitors and becomes sometimes uncompetitive. It would be helpful to allow work to be completed outside Canada (and still claim an SR&ED credit), if for example the Canadian supplier is more than 10-20% higher in price than foreign competition.
In sum, although the SR&ED program is supposed to help Canadian companies, there are some areas which contradict that purpose and therefore require a closer look.
Wouter van Essen
Liberty Motor Company Inc.
2390 South Service Rd. West