A recent PwC report found that Canadian start-up companies are looking more into building their business than into Mergers & Acquisition exits. Government funding provides significant assistance for Canadian technology start-ups, with 50% of start-ups surveyed applying for at least one source of funding, according to the report. Amongst these start-ups, 35% said they took advantage of “Scientific Research and Experimental Development” tax credits (SR&ED), while 20% said they dipped into the Industry Research Assistance Program (IRAP).
Canadian start-up companies can take advantage of both SR&ED and IRAP programs. IRAP can assist start-ups with upfront funding, prior to the onset of a R&D project. IRAP can provide SME’s with up to $250,000 to encourage technological innovation, and is administered by the National Research Council (NRC). On the other hand, SR&ED is administered by the Canada Revenue Agency (CRA), and reimburses companies for R&D expenditures after they have been incurred.