Archive for the ‘SR&ED’ Category

Ontario Budget 2018 Highlights

The Ontario 2018 Budget, tabled on March 28, 2018, projects a growing deficit over the next three years and is predicted to resume a downward trend in 2022 with accumulated deficit expected to decline from 23.2% of gross domestic product (GDP) in 2017-18 to 22.1% by 2022.

The Ontario Budget proposes several measures and investments that impact businesses, including:

Innovation

  • An increase to the Ontario Research and Development Tax Credit (ORDTC) from 3.5% to 5.5% for eligible R&D expenditures over $1M (per taxation year) incurred on or after March 28, 2018.
  • Enhancements to the Ontario Innovation Tax Credit (OITC) for eligible R&D expenditures incurred on or after March 28, 2018 based on the ratio of R&D expenditures to gross revenues. Companies with a ratio of R&D expenditures to gross revenue of:
    • 10% or less will continue to claim the OITC at a rate of 8%;
    • 10-20% will be eligible for an enhanced OITC rate that will increase from 8% to 12% on a straight-line basis; and
    • 20% or more will be eligible to claim the OITC at a rate of 12%.
  • Expansions to the Ontario Interactive Digital Media Tax Credit (OIDMTC) eligibility criteria to include broadcaster purchased or licensed film/television websites that host film, television, or Internet production content not previously assessed (before Nov 1, 2017).
  • A review of various tax incentives implemented in other jurisdictions such as preferential corporate income tax rates (i.e., patent boxes), tax refunds, tax deductions, and exemptions with the intention of developing a provincial incentive to encourage Intellectual Property (IP).
  • An additional $50M over 10 years for the New Transformative Technology Partnerships Fund for businesses, SMEs, and scale‐ups as well as post-secondary and research institutions to collaborate on new dynamic products and services in artificial intelligence (AI), 5G wireless communications, autonomous vehicles, advanced computing, and quantum technologies.

Business Growth

  • In parallel with the 2018 Federal Budget proposal to phase-out or grind the $500,000 small-business limit, the Ontario Budget proposes to phase out the small-business limit on a straight-line basis for CCPCs (and associated corporations) earning between $50,000 and $150,000 of passive investment income in taxation years beginning after 2018.
  • Ending the electricity debt retirement charge (DRC) for mid-sized commercial and industrial non-ICI or non-RRP, Class B consumers as of April 1, 2018.
  • An additional $100M over 10 years for the Eastern Ontario Development Fund (EODF) and the Southwestern Ontario Development Fund (SWODF) to support regional economic development by creating jobs, attracting private sector investment and promoting innovation, and encouraging collaboration and cluster development.
  • An additional $500M over 10 years for the New Economy Fund for investing in priority sectors such as advanced manufacturing, information and communication technology (ICT), life sciences, and clean-tech.
  • An additional $85M over 3 years for the Northern Ontario Heritage Fund to stimulate economic development and diversification across the region.
  • An additional $100M over 10 years for a new Greater Toronto & Hamilton Area Fund to support SMEs in the GTA and Hamilton area.

Export Market

  • Work to implement a Global Trade Strategy to diversify and promote trade in Ontario. This will include the Accelerate to International Markets program, the Global Growth Fund, and the Magnet Export Business Portal.

Startup Support

  • An additional $85M over 10 years for a new Venture Technology Fund to support a select number of very high‐potential, fast‐growing firms in expanding to become globally competitive.
  • An additional $15M over the next 3 years to NextAI, a Toronto based accelerator for early stage startups that leverage AI technologies.

Workforce Development

  • An additional $170M over 3 years for the new Ontario Apprenticeship Strategy to support transition into apprenticeship from high school, make the system easier to navigate, and to improve access for apprentices to high‐quality jobs upon completion.
  • Transforming the Apprenticeship Training Tax Credit (ATTC) into the new Graduated Apprenticeship Grant for Employers (GAGE) to encourage employers to ensure that apprentices complete their training.

Our Manufacturing Roots Run Deep

Before building a SR&ED and government funding consultation business, Sol Algranti, President and CEO of Northbridge Consultants, worked in the manufacturing industry for many years.

After finishing education in a high school for skilled trades, Sol began working in a large plastics manufacturing company where he gained practical knowledge of various plastic processes including injection moulding, blow moulding, extrusion and co-extrusion. He completed his Bachelor’s degree in Mechanical Engineering while working for an optical glass manufacturer, where he developed improved processes and designed pneumatically-controlled machines. After completing his Master’s degree in Systems Engineering, Sol worked as the Chief of Planning/Scheduling in a large plastic pipe manufacturing company and started a metallurgy business, providing metal heat treatment services to manufacturing companies.

Sol applied his expertise to improve manufacturing methods, and to reduce costs as the process engineer for Westbend of Canada in Barrie, Ontario. Thereafter, Sol’s expertise in plastics earned him the position of Advanced Manufacturing Engineer at Camco (Canadian Appliance Manufacturing Company), where he was responsible for all plastics processes and optimized operations in the large Hamilton, London and Montreal facilities during a major transition period. Sol then moved to a position at ABC group for MSB Plastics as the general manager for their struggling Toronto facility.   Sol worked 6 days per week to optimize operations and within two to three months, he had transformed it into a profitable operation.

In 1989, Sol negotiated a leveraged buyout to acquire Shirlon Plastics, an established Cambridge-based manufacturer of plastics products with a niche in the Canadian Recreational Vehicle (RV) industry. Less than a year later, the 1990 recession began and the RV industry was one of the hardest hit sectors, forcing many RV manufacturers to go out of business. On the brink of bankruptcy, Sol  worked relentlessly to expand his market base to the United States, and took huge financial risk to invest in the diversification of his product line. His efforts paid off and enabled Shirlon to not only survive the recession but to thrive afterwards.

Sol expanded his business through a diversification into gardening products, and through the acquisition of several companies including a large vacuum forming and sheet extrusion company, a plastics rotational moulding business, and a custom mould manufacturer.  He relied on intensive R&D to improve his product line, to increase market share, and to remain competitive, he began claiming for SR&ED tax credits. The funding he received from the SR&ED program was reinvested into the development of new products and new technologies. By 2007, Sol had 6 manufacturing companies in plastic products and tooling industries and continues today to be involved in manufacturing through his remaining plastics company, investments, and consulting practice.

Sol’s profound background in research and development in the manufacturing sector has provided Northbridge with a strong foundation in the SR&ED program. Moreover, Sol’s manufacturing heritage gives NorthBridge a unique understanding of the risks that manufacturers take when they invest in R&D and the overall challenges that manufacturing businesses face when trying to grow and remain competitive.

Free Seminar: Learn How to Manage IP & SR&ED to Boost Corporate Value

When it comes to intellectual property (IP) and Scientific Research and Experimental Development (SR&ED) tax credits, CFOs must constantly assess the value of the services that they receive in exchange for engagement fees. Making this assessment can be challenging to the point of frustrating. CFOs must keep the bigger picture of overall financial health of their organization, while dealing with a complex management regime consisting of CTOs and CMOs. Further challenges arise due to complex and opaque billing practices by law firms and SR&ED consultation firms.

Agenda for SR&ED:

  • Basic overview
  • Tracking experimentation for CRA compliance
  • Labour tracking for CRA compliance
  • Integrating SR&ED intro tracking systems
  • Setting up a strategy

Agenda for Intellectual Property:

  • Basic overview of IP regimes
  • Identifying points of differences in your business
  • Selecting an appropriate IP regime that provides a barrier to entry for those points of difference
  • Setting an IP strategy for your company
  • Setting an IP management committee
  • Business case criteria for IP filings
  • Setting fee schedules and billing practices to maximize transparency and accountability

Event details:

Speakers:
Gerry Fung, CPA CMA, P.Eng.
VP of Business Services at NorthBridge Consultants

Andrew Currier, BSEE, LL.B., P.Eng.
CEO of Perry + Currier Inc.

Date & Time:
Friday, 22 September 2017 from
8:00 AM to 10:00 AM (EDT)

* Eligible for substantive hours

Location:
PCK Perry + Currier Inc.
500-1300 Yonge Street
Toronto, Ontario M4T 1X3
Canada (MAP LINK)

Register Online 

For more information please contact:

 NorthBridge Consultants
1-519-623-2486 x230
ela@northbridgeconsultants.com

or

PCK IP
1-416-920-8170 x136
low@pckip.com

EMC Strategic Interest Group Networking Event

OWEN SOUND & AREA

BRUCE | GREY | HURON

Event Details:

Date: Wednesday, January 25, 2017

Location: Hobart Food Equipment Grp; 2875 East Bay Shore Rd, Owen Sound (MAP)

To register for this event please contact Jeff Mitobe

Agenda Items:

  • Welcome, Introductions & EMC Update
  • Discussion as per SIGs below
  • Plant Tour
  • Roundtable Networking

Financing Opportunities and SR&ED (8:00 – 9:45)

  • Please join us for an interactive presentation by NorthBridge Consultants on the many Government Funding Opportunities available to manufacturers and the Scientific Research & Experimental Development (SR&ED) Tax Credit Program
  • Learn how Hobart has utilized the Lighting Retrofit Rebate and their expected year over year savings
  • Making SR&ED a part of your workday
Plant Tour/Best Practice Walk (9:45 – 10:30)

  • Safety Shoes, Safety Glasses, Hearing protection
Integrating Multiple Demographic Groups (10:30 – 12:30)Are you struggling to integrate different demographic groups in your workplace?How do you build a bridge between the 20-somethings and the 40-somethings?–Is it even necessary?Have you come to realize that a person’s challenges outside work are NOT left at the door?–How do you propose to accommodate them?

  • Mike will share examples of the struggles Hobart is facing in hiring & integrating demographic groups.
  • Please arrive prepared to share and discuss any policies and procedures which you feel are starting to show fruition or have utterly failed.
Reminder to Members: Please visit your home consortium page on EMC’s website for more information on upcoming events, online SIG registrations and more!If you are a member, come out to our next local event to meet your neighbors again. If you are not yet involved, get in touch…the manufacturers down the street want to meet you, and so do we.

Tags: ,

Is a Canadian Patent Box System on the Horizon?

With the process of implementing a ‘patent box’ system ongoing in Quebec, much attention has been given recently to such a system across Canada to address our innovation gap—despite possessing one of the highest rates for R&D tax credits, Canada is lagging behind other leading developed countries when it comes to introducing innovation.

A patent box system is intended to foster the commercialization of intellectual property by reducing the percentage of tax applied to profits resulting from patented innovations. In contrast to SR&ED tax credits, which target the front end of the innovation lifecycle, a patent box regime targets commercialization, the last stage of the lifecycle. Therefore a patent box has the potential to mesh well with the SR&ED program to promote the entire R&D process.

The federal implementation of a patent box, however, would be neither straightforward nor cheap. The development of a robust framework would be required to determine the validity of claims and criteria for eligibility.

Many patent box systems have been introduced in developed countries within the last decade, especially in Europe. The UK program, for example, began in 2013 and reduces corporate tax on profit broadly related to the invention, from 22% to 10%. The Netherlands has had an innovation box system since 2007, which now encompasses a similarly broad range of IP, with a tax rate reduced from 25% to 5%.

Beginning in 2017, Quebec’s “innovative companies deduction” will allow revenue from innovation developed in the province to be taxed at 4% rather than 11.8%. The limitations to eligibility are an effort to keep the benefits of the tax reductions to companies based in Quebec. Other provinces, such as Saskatchewan, could be following suit soon.

While it is currently unknown when, or if, a Canada-wide patent box system is forthcoming, one thing that remains certain is that the debate on the need, benefit, and cost of the program will continue.  NorthBridge Consultants is dedicated to bringing you the most recent news and updates on various federal and provincial programs and will continue to provide updates on the topic of patent boxes as they become available.

  • Subscribe to our feed
  • NorthBridge Consultants' Government Funding Blog is dedicated to bringing businesses news and information to help them identify and access the most appropriate government funding programs.

    We offer opinions and insider information that can provide a pulse on government initiatives, the health of the Canadian economy, and firsthand thoughts from Canadian business owners.

Most Recent Entries

Upcoming Events