And it was crazy, and awesome, and intense, and all kinds of brilliant.

One of the most exciting parts was walking around the exhibition floor, seeing all the different toy and collectible manufacturers with new products that they are bringing out in the near future. Some of these items will be available in the upcoming year, but some of them are just preliminary prototypes that the companies will be modifying and improving on before bringing out the finished products.

The process for manufacturing toys and collectibles, if you look at the basic steps, isn’t too different than manufacturing anything else. And having prototypes can be a great benefit to your Scientific Research and Experimental Development claim.

Developing a prototype is a part of the iterative process that SR&ED projects typically follow – design, prototype, testing, redesign, prototype, testing, and so on, until the final objective is reached. By keeping these prototypes that you have made, you have evidence for the CRA (should a review occur) that there was systematic investigation and experimentation done during your SR&ED project.

But the reality of the situation is that your trade secrets are safe and are kept completely confidential.

First of all, the CRA only looks as deep as it needs to, in order to discover whether your SR&ED projects qualify for the program – they only looks to see that there are technological obstacles, technological advancement and technical content. It isn’t always necessary for the CRA to look at the exact principles of your projects – when it is necessary, they maintain the strictest of confidentiality. In fact, the CRA has put rules and legislative precautions in place in order to protect your confidentiality.

If you are working with a consultant to prepare your SR&ED claim, your consultant should also maintain the strictest confidentiality with your technologies and intellectual property. If you have any concerns that these may not be the case, a standard non-disclosure agreement should be signed to the respect.

So, it is indeed a myth that your trade secrets aren’t safe when claiming for the SR&ED program, and this should not be a reason why you don’t consider filing for the SR&ED program.

Take, for instance, an American-owned company that has a branch in Canada. This Canadian branch manufactures custom products for its customers, and regularly has to work through technological obstacles to create the final product that was required.

Because this American-owned company has a branch that operates in Canada, and pays taxes to the Canadian government, this foreign-owned company would be eligible for the Scientific Research and Experimental Development program. Unlike privately-owned businesses, however, this foreign-owned company would be eligible to receive 20% of their claim in the form of tax credits. These tax credits can be applied retrospectively ten years, or can be applied forward three years.

That all depends on the situation and how you got the software.

Did you buy it from the store and install it without any major difficulties? If so, it isn’t eligible for the SR&ED program.

Did you contract out to someone to develop it for you, or did you develop it in-house? In that case, it may be eligible for the SR&ED program. This is going to depend on a few factors – whether there were any technological obstacles that were faced, who the owner of the intellectual property is, and whether the person doing the development knows the IT industry (ie – a computer software engineer).

IT is one of the hardest industries to determine your own eligibility for the SR&ED program. We encourage you to contact us to set up a meeting to see whether your IT project can be claimed for through the SR&ED program.

One of the sources of the problem suggested is that Canadian companies feel insecure about purchasing innovative products from other Canadian companies – and if a company cannot sell its products to other Canadian companies, then global companies start to question the value of the products.

Another source of the problem that is suggested is that Canada exports raw materials to be processed elsewhere instead of processing it here ourselves.

The report is not all bad news, however. It has been suggested that biofuels is an industry where Canada could become a leader.

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