[ Image courtesy of the Toronto Star ]

During the Leaders’ english debate on October the 3rd, one issue that was broached was the federal SRED (Scientific Research and Experimental Development) business incentive program. Under the existing federal SR&ED program, non-profitable corporations with large revenues may receive research and development tax credits that cannot be applied.  Liberal leader Stephane Dion and Bloc Québécois leader Gilles Duceppe both proposed that these tax credits be partially refundable.

“A Liberal Government will encourage all companies to innovate, even if their innovation does not lead to immediate profitability, by making the SR&ED Tax Credit partially refundable. This change is vital at a time when many companies are struggling to become or stay profitable.  Every company that puts money into R&D should be rewarded for innovating.” [ Source ]

Large corporations can sometimes receive millions of dollars in tax credits through the SR&ED program.  I think that this measure, if implemented, will increase the cashflows of these large corporations drastically!

With a federal election just around the corner, Canada is experiencing weakest GDP growth in almost 17 years.  The deteriorating health of the Canadian economy is reflected in recent polls, in which Canadians now rank the economy ahead of health care and the environment as their chief concern.

“For too long, we allowed high commodity prices to make us feel wealthy,” says Glen Hodgson, chief economist at the Conference Board of Canada. “In a perfect world, we’d have an election campaign that debated how to improve our lagging productivity, which any economist will tell you is the key to sustainable prosperity.”

According to Anne Golden, President of the Conference Board of Canada, steps that are needed to ensure sustainable prosperity include:  enhanced labour mobility, a credentialing system that more rapidly integrates skilled newcomers, along with measures to improve health care.

I think that the key to turn around the economy is to enhance labour mobility by investing in R&D and scientific innovation.  Investment dollars need to be spent to encourage students to pursue advanced studies in engineering, physics, and math, because these are the fields of studies that are pre-requisites to scientific innovation.