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.