Archive for April, 2010

A lot of companies think that what they do isn’t eligible for the SR&ED program, but we don’t always agree. A lot of companies are doing work that is eligible without even realizing that what they are doing is considered the innovative work that the SR&ED program was created to assist with.

Sometimes it’s easiest to see what can be considered SR&ED by taking a look at what qualifies for other companies, and so, here are five fictional companies that are doing work that would be eligible for the SR&ED program.

1. Cyberdyne Systems Corporation from The Terminator Movie Franchise. How would this qualify for the SR&ED program? Cyberdyne is responsible for creating Skynet, an artificial intelligence system that was completely self-aware. Cyberdyne would have faced technological obstacles in the development of the self-awareness aspect of the AI system.
2. Veridian Dynamics from Better off Ted. How would this qualify for the SR&ED program? Veridian Dynamics is a strictly Research and Development company, whose goal is to create real solutions to everyday problems.This is the type of company that most people automatically consider when thinking about SR&ED – a pure Research and Development firm. Veridian Dynamics would have faced technological obstacles in the invention of products such as the creation of lab-grown meat (through the use of bovine cells).
3. Rossum Corporation from Dollhouse. How would this qualify for the SR&ED program? The Rossum Corporation is a drug research entity. The Rossum Corporation would have faced technological obstacles in developing medication that can battle PTSD and are on their way to assisting with diseases such as Alzheimer’s Syndrome.
4. InGen from Jurassic Park. How would this qualify for the SR&ED program? This genetic engineering company would be working in a field where nothing they are doing has been documented before, so nothing they were involved with could be considered common knowledge to their industry. InGen would have faced technological obstacles in knowing exactly how to extract blood from mosquitoes to clone the dinosaurs, as well as knowing how much blood they needed to extract.
5. Tyrell Corporation from Blade Runner. How would this qualify for the SR&ED program? Tyrell Corporation is bio-tech corporation that specializes in creating humanoid androids. The Tyrell Corporation would have faced technological obstacles in improving their androids so that were eventually so organic that it was next-to-impossible to tell that they weren’t actually human.

All of these fictional companies are doing what could be eligible for the SR&ED program, if only they (a) weren’t fictional and (b) had operations in Canada. There is a wide selection of companies here – from R&D companies, to companies who have created new products, to ones that have improved their products… and they are in a range of industries as well: IT, pharmaceuticals, genetics, etc.

So what can we take away from looking at these five companies? That you could work in a large range of industries, doing a large range of things in order to be applicable for the SR&ED program. Interested in learning whether you are eligible for the SR&ED program? Contact us now

In March both Quebec and Manitoba announced their 2010 provincial budgets – and both provincial governments have made changes to their provincial SR&ED programs.

Manitoba’s budget, announced on March 23rd, made changes to how the provincial refund would be given to companies. Starting in 2011, all SR&ED performed in Manitoba will be eligible for a partially refundable tax credit – previously, only companies working with institutions in Manitoba were eligible, all other companies received a non-refundable tax credit. (A non-refundable tax credit is applied directly to your taxes, so if a company did not have a profitable year and did not owe any taxes, then they would not have access to the tax credit.) In 2011, companies can receive a quarter of their tax credit; in 2012, companies can receive half of their tax credit.

Quebec’s budget, announced on March 30, made changes to what was eligible for their provincial refund. Additional costs that are now applicable for this provincial credit are costs to use pharmaceutical companies or clinical research organizations. As well, the wage credit has been modified slightly so that owner-managers of eligible companies can be treated as an eligible employee.

These changes reflect that the Manitoba and Quebec governments are improving their provincial budgets in order to help companies in those provinces who are involved with doing innovative work in their field.

According to February’s Monthly Survey of Manufacturing, released on April 16th, done by Statistics Canada, manufacturing sales increased once again.

Some quick stats:

1. In eight of the previous nine months, sales have been increasing.
2. Dollar manufacturing sales have increased every month for the past six months. In February, that increase was 0.3%
3. Durable good (electronic products, appliances, furniture, etc) sales dropped by 0.3%, but non-durable (foods, clothing, paper, petroleum, etc) good sales increased by 0.3%
4. Most sales increases were in Ontario and in Western Canada. Quebec, Newfoundland and Labrador, New Brunswick and Nova Scotia all saw a decline in sales in February

Source

1. Know your competition. Know what they’re doing, what their strengths and weaknesses are, who their target market is. Know what they want to do. The more you know about your competition, the better you can position yourselves in comparison to them.
2. Attend industry seminars and trade shows. Go to the panels and workshops. See what’s new from your suppliers, or what new technology is out there that will help make your job a little bit easier. Discover new techniques to do what you already do. Never stop learning.
3. Test your products. Depending on the type of product you have, you may need to do focus group testing, or usability testing, or stress testing. No matter what needs to be done though, testing is vital for any product – it keeps that quality of your product high. High quality products typically result in happier customers, and happier customers are more likely to stick with you than head to your competition.
4. Keep your current customers happy. We are always thinking about how to get new customers, and it’s not unusual for us to forget about our current customer base. Keeping our current customers happy is one of the best ways to keep ensuring our customers don’t go to our competitors.
5. Know what your customers want. This goes hand-in-hand with the above point. If you know what your customers want, then you can be sure that you are giving them what they want – especially when your competition isn’t. Be careful, though, to make sure you don’t become too preoccupied with what your customer wants, as you could lose focus on the big picture of your product.
6. Don’t get stuck on what has happened in the past. Focusing too much on the past won’t let us get a clear picture of what is happening currently, or won’t let us work towards where we want to be in the future. Whether it is something good that has happened in the past, or something bad, it can give us a skewed image of where we are right now.
7. Promote yourself and your products in different areas.
8. Don’t feel the need to compete on price. There are other ways that you can compete with your competition, than through pricing. You have to take into account the quality of products, the target market, and other considerations as well as pricing.
9. Never stop innovating. Products and processes can constantly be improved upon – innovation can happen at any point in the design process. Even after a product has been released, innovation can happen to make future product releases better.
10. Take advantage of government grants, loans and tax incentive programs. The SR&ED program is a great example of this – the SR&ED program will provide you with a cash refund or tax credit as a reimbursement for money that you have spent on creating and improving products and processes. Additional sources of funding can give you the much needed cash flow to invest in your business that will allow you to remain competitive.