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Northbridge Consultants

June 2010 Issue 20

This Issue Turning Lemons into Lemonade | Testimonial | Employee Profile | Tips & Tricks
Vision & Mission Statements | On the Blog | In the News | Grant and Loan Guide | Ask the Experts

Turning Lemons into Lemonade

The Canadian dollar is not only once again challenging the U.S. greenback, it’s also possibly looking to match the Euro — and this means that companies must brace for sales lulls. The current state of exporting manufactured goods to the U.S. is already dampening many of our core raw material industries but, as the Canadian dollar dukes it out with our friends to the South, it’s as if a big spotlight has been put on the Canadian manufacturing sector. Since there is nothing we can really do about it except ride the global economy wave and scramble to diversify our markets, we should be thinking about present circumstances and potential opportunities, and making the best of it!

If you turn on one of the U.S. news stations, you’ll hear the same ‘doom and gloom’ economic forecasting . Sometimes they try to put a nice face on their fiscal state with skeptical employment and spending figures but, the reality of the situation is clear to anyone in manufacturing: it’s rough out there right now and there is not going to be any quick fix.

March 3, 2010 was a good day for manufacturers in Canada. During the annual Throne Speech we were informed of an unprecedented level of Government support for manufacturing in terms of spurring innovation and market diversification. While we, in the SR&ED (Scientific Research & Experimental Development) services sector, have already been heavily involved in helping companies claim for such support programs, more companies across all industries are learning that Innovation is the key to Canada’s success and that there really is a lot of available help just waiting out there.

Investigating new equipment can get the ball rolling in terms of new product development or process improvements. The information readily available both on the Internet and a phone call away can give you ideas towards becoming a more efficient and effective manufacturer. Canadians, for the most part, understand that collaboration is a fundamental component of our export-ability; it is surprising how many business owners share proprietary information for the sake of the country as a whole. The initial colabrative research could then lead to thinking about improving efficiencies — potentially even through new equipment.

When it comes to manufacturing, Canada is lagging in efficiency when compared to the U.S. and Europe. With the changes to tariffs on foreign purchased equipment, now is the time to start looking at advancing our manufacturing technologies. By axing the import duties on new equipment, the government has essentially provided ideal conditions for companies looking to become more efficient and productive.

Innovation support programs, removal of tariffs on foreign equipment and the value of our dollar are giving us an opportunity to redefine our manufacturing sector for decades to come. Canadian businesses should seriously consider capitalizing on the state-of-affairs if they truly want to remain competitive in manufacturing on a global scale and turn lemons into lemonade.

Testimonial

“As a company that is still fairly young, as well as being a first time claimant, we realized that the SR&ED program would be a great asset to the growth of our company, as well as to the development of our technologies. The Northbridge team was able to coach us and mediate for us while we were claiming for SR&ED in a professional manner that reassured us throughout the whole process. With their assistance, we received our SR&ED refund three months after we had submitted our claim, allowing us to reinvest the funds back into our business.”

—Eric Vlessing, President of Sofa4Life

Sofa4Life manufactures the Coja and Amici55 brand custom leather upholstery, including sofa's, chairs, sectionals, recliners and home theater seating. skilled fabricators and welders.

Employee Spotlight: Paul Chiasson

Paul Chiasson

Position SR&ED Project Leader and Account Manager

Experience in industry Since graduating in 1991, Paul's career has brought him around the world through various industries Ė including the automotive, electronics, and gaming industries. His experience includes 15 years in Product Development, 11 of which involved preparing SR&ED claims.

Educational background Bacc. Applied Science, Industrial Engineering, Post-Graduate Studies in Mechanical Engineering (Applied Fluid Dynamics)

Professional Memberships and Designations P.Eng. (APEGNB)

Hobbies/Interests Hockey, coaching, motocross riding with his son, skiing, woodworking and home improvements.

Biggest non-work-related accomplishment Building an in-ground pool, raising two beautiful children with his wife.

Tips & Tricks

There are multiple reasons for inconsistent tracking of R&D hours including not enough time, no access to a workstation, improper/lack of training, and resistance to the process.

  • Not enough time? We have formats which can be custom tailored to each department. Also, we provide tracking templates and training which can only take 5 minutes per week to fill out.
  • No Workstation/Computer? Try a log book or notebook. Great for on-the-fly sketches and schematics, data collection and tracking of hours per project.
  • Lack of Training? Call us up; we will be more than happy to meet with each company department to explain the process and implement a system that works best for each department.
  • Resistance to the process? Again, let us meet with staff to show the full benefits of the program and how easy it is to stay on track!
 

Vision Statement

To be the premier consulting partner for Canadian businesses by offering personalized services that support client and corporate goals. Our top priority is to fulfill the client's needs through the delivery of service excellence, professional expertise and reliability, the preservation of the utmost integrity, and the passionate encouragement of teamwork and employee development.

Mission Statement

Northbridge provides results oriented consulting services through the development of adaptable and innovative business solutions for firms operating in Canada.

On the Blog

Northbridge continues to bring you the latest updates and hot topics that are important to our clients. Some of our May highlights:

Read about these topics and more on our blog.

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In the News

Ontario Harmonized Sales Tax

As of July 1st, 2010, the 8% PST and the 5% GST are being combined into a single 13% sales tax in Ontario (rates may differ provincially). The upcoming implementation of the HST has many of our clients worried about how this will affect their bottom line. For instance, industries that have been PST exempt are going to see an 8% increase in their sales taxes which could really hurt their business. Ontario has anticipated how the HST will impact many companies and is providing $4.6 Billion in tax relief over the next 3 years, including Corporate Income Tax (CIT) cuts starting July 1st, 2010;

  • The general CIT rate will be lowered from 14% to 12% and then further reduced to 10% over the next 3 years
  • The CIT rate for manufacturing and processing companies will be lowered from 12% to 10%
  • Most businesses will receive input tax credits for sales tax they pay on many of their business purchases and capital investments

Check out the link below to find out more information about the HST, cuts to business taxes, and how to prepare your business for the HST: http://www.rev.gov.on.ca/en/taxchange/publications.html

Reminder: HST must be charged on any billings on or after May 1st, 2010 for taxable goods, services, or intangible property to be supplied after July 1st, 2010.

Events

Northbridge recently participated in the EMC National Manufacturing Conference “Advantage Through Excellence” which took place May 10th to 12th. The conference was attended by 6oo+ and Northbridge had the opportunity to speak with many companies from a range of industries. The 3 day conference consisted of various plant tours, workshops, keynote speakers, and the EMC Awards of Excellence dinner with Rick Mercer. It was an invaluable event for all, and a huge success for EMC.

We invite you to visit our booth at the upcoming 69th annual Canadian Association of Recycling Industries (CARI) Convention. This is taking place at The Delta Prince Edward Hotel in Charlottetown, PEI on June 10th to 12th, 2010.

Stay posted for future Northbridge events.

Dates to Remember

June 30: December 2008 FYE claims due now

Grant and Loan Guide

Some clients looking for additional funding have been approaching us for information on other grants and loans. While we can provide some general information, we are not experts in claiming for these other grants and loans, and do not necessarily assist companies in applying for these programs. In the upcoming issues, we will be highlighting some of these other grant and loan programs.

NSERC Engage Grants Program

To encourage the partnership between industrial businesses and academic researchers. Companies can receive up to $25,000 for a program that lasts up to 6-months. http://www.nserc-crsng.gc.ca/Professors-Professeurs/RPP-PP/Engage-Engagement_eng.asp

MITACS

This organization helps companies with university partnerships through internships for short term R&D projects. Companies can receive half of the studentís internship pay (up to $7,500). The portion of the student's pay that is not covered through MITACS is SR&ED eligible as a subcontractor cost. http://www.mitacs.ca/index.php?option=com_content&view=article&id=243&Itemid=6&lang=en

This is information of a general nature only; Northbridge does not necessarily assisst companies applying for the grants and loans listed above. Projects may not be eligible for more than one grant or loan; receiving funding from one grant or loan may disqualify that project from others, including the SR&ED program. Please speak with your Account Manager for more information.

Ask the Experts

Dear Northbridge;

We were at one of your seminars and decided to sign-up with Northbridge. Although we have a pretty good understanding of how to capture all of the eligible applied Research and Development activities, we wonder if there are other areas of our organization that can also benefit from the program, but are unsure where to begin looking as we prepare for our initial visit with a Northbridge SR&ED consultant.

 

Dear Valued Client,

An often overlooked area for eligible SR&ED activities are process improvements. Companies that survive are companies that innovate; certainly you donít operate today as you operated 2,3 or 5 years ago. Your manufacturing processes are constantly evolving to keep up with the ever increasing level of technology and to keep pace with foreign competition. Even within traditionally low-tech but very competitive industries such as forestry and construction, Canadian companies are finding ways every day of improving quality, adding value or being more efficient. Most companies have literally hundreds of process improvement solutions implemented every year, that would be inconsequent when looked at individually, however, bundled together, these experimental development efforts amount to progressive technological leaps and gains. Some fail and some succeed, but as long as the effort is to make a technological gain and that you identify the challenges and uncertainties, the development, implementation and monitoring of these solutions can be eligible under the program. Machine improvements, quality improvement initiatives, tighter tolerances, increased throughput or reduced labour costs and outsourcing are areas to look at when trying to capture eligible activities. Your local Northbridge SR&ED professional will help you identify these process improvements and organize all of the necessary information to substantiate the claim.

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While we endeavor to ensure accurate information through this newsletter, it is not a definitive analysis of legislation, or a substitute for professional advice. Please seek professional advice if attempting to relate specific situations to the information disclosed within.