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Northbridge Consultants

August 2010 Issue 22

This Issue New Claim Review Manual | Testimonial | Employee Spotlight | Tips & Tricks | Events
On the Blog | In the News | Grant and Loan Guide | Ask the Experts

The New Claim Review Manual

Over the past year, the CRA has been working to improve the SR&ED program. In April, CRA reviewers started spending more time explaining the SR&ED program to claimants. The reviewers are also now required to inform claimants about any SR&ED expenditures that they may have missed when submitting their claim. Time permitting, the claimant can resubmit their claim with all expenditures included. As well, the CRA will soon be posting quarterly reports on their website that indicate how long it takes for them to review an SR&ED claim from start to finish.

One of the big changes occurred on June 1st, when the CRA reviewers for the SR&ED program started using a new Claim Review Manual the Guide to Conducting a Scientific Research and Experimental Development Review Part 1: The Technical Review. All claims that are submitted will be subject to the procedures and regulations outlined in this manual. The purpose of this manual is to make the review process consistent from review to review, and from reviewer to reviewer. It's a guideline for what the reviewers should be doing every time they review an SR&ED claim while the new manual is fairly consistent with older review manuals that have been used in the past, there are some areas where this new manual is more detailed, such as the processes that need to be followed, and the evidence that is required to support SR&ED claims.

With this new manual in place, claimants can expect to work more with the reviewer before and throughout the review process. The manual is also intended to increase the co-ordination between technical and financial reviewers, to give clearer timelines for the review to take place, and to increase the quality of communication between the reviewer and yourself as a claimant for the SR&ED program. Along with the Claim Review Manual, a guide for claimants was also released The SR&ED Technical Review: A Guide for Claimants. This guide is meant to be a more concise version of the Claim Review Manual for those claimants interested in being better prepared for the technical review. It summarizes the steps that the reviewers must follow during the review process, and explains how reviewers and claimants can work together. It also emphasizes the importance of proper documentation for all claims. What does this mean for you?

In relation to documentation, there are now specific guidelines as to what kind of evidence is required from the CRA. The format of any support documentation for your claim may need to change. You may also need to go more in depth in some areas. The Northbridge team will work with you to guarantee that you have the correct documentation if and when a review of your claim takes place. Both the Claim Review Manual and the Guide for Claimants emphasize the importance of communication between the reviewers and the claimants. Since Northbridge works with you during the entire SR&ED process, we will be working with the reviewer on your behalf before, throughout, and after the review, so these new guidelines mean that we can work more easily with the CRA to ensure that you get the most value for your SR&ED claim.

As always, the Northbridge team is dedicated to informing you of any changes to the SR&ED program. If you have any questions as to how these changes are going to affect you, contact your Account Manager. We're here to help you maximize your SR&ED claim!


“We have been working with Northbridge to recover substantial costs related to development of new applications and technical advances in our industry.

We have surprised ourselves at how much labour and material are expended in development, costs which we did not previously recognize as recoverable. It is with your professional assistance that we have looked on these costs with a new perspective, and with your help we are improving our tracking process to increase our effectiveness in capturing these expenses.

We look forward to working with you on our next claim.

— Judith Atkinson, President of Zelus Material Handling, Inc

Zelus designs, manufactures and services overhead cranes.

Employee Spotlight: George Markham

Position Business Development Manager

Industry Experience Twenty years of experience in Project Management, Operations Management, and Lean Manufacturing. George prepared his first SR&ED claims for J I Case in 1990.

Educational Background Bachelors Degree in Industrial Engineering from Ryerson University.

Professional Memberships and Designations Licensed to Practice as a Professional Engineer in the Province of Ontario since 1995.

Hobbies/Interests Landscaping, nature, hiking with friends, camping with his three sons, music, movies, sports, and history.

Biggest non-work-related Accomplishment Leading the West Hamilton Youth Soccer Club during its largest growth period as Club President from 1995 through 1997.

Tips & Tricks

When preparing the financial data for your claim, be sure to accumulate all of the invoices, contracts and time sheets into one central, and secure location; it is amazing how quickly important documents can disappear. This simple preventative measure is crucial whenever there are changes in SR&ED management.

Make sure to keep hard copies of all important e-mails and documents. Many companies store e-mail on servers for less than a year.

Do not rely solely on typical job "docket" systems to exclusively track any element of R&D projects generally a significant amount of testing and development occurs that is forgotten and not recorded.

Take the time to set up a proper system to track the hours/capital associated with each project and have the discipline to keep it up to date. Remember if your claim is reviewed, you need to be able to defend the work and time spent.



CARI Regional Meetings

Northbridge will be on the road as part of the Canadian Association of Recycling Industries (CARI) Regional Meetings in the following cities. Please feel free to contact us for a visit with one of our senior consultants during the following dates in your area:

  • Monday September 13th: Vancouver
  • Tuesday September 14th: Calgary
  • Wednesday Sept. 15th: Winnipeg
  • Thursday September 16th: Halifax

Breakfast Seminar

We will be in the Hamilton/Niagara area on Thursday September 16th hosting a breakfast seminar for those interested in learning more about the SR&ED program and the recent changes to the program. Please contact us if you or someone from your company would like to attend this session.

Canadian Greenhouse Conference

We invite you to visit our booth at Canadian Greenhouse Conference, taking place at the International Center in Toronto October 6th & 7th. Northbridge Consultants will be speaking at this event.

Dates to Remember

August 31st: February 2009 FYE claims due no

On the Blog

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

  • June's Job Surge. The employment rate across Canada rose 0.2 per cent, or by 93,000 new jobs throughout the month of June. We take a look at how that worked out through each province.
  • Confrontation in the Workplace. How can you work to minimize confrontation in the workplace? What can you do when you're faced with confrontation in the workplace? We look at how to best deal with confrontation.
  • Telecommuting Successfully. In our Quick Tips series, we take a look at ten tips on how to work from home.

Read about these topics and more on our blog.

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In the News

The recently introduced HST came into effect on July 1st, 2010. In Ontario, consumers are now paying 13% for services not previously associated with PST. British Columbia has introduced HST at a rate of 12% for the province. HST has been in the Atlantic provinces (except PEI) since 1997, and was originally as high as 15%. Recent reductions in GST rates have brought the rate down to 13% in the Maritime provinces, however, Nova Scotia has raised their combined rate up by 2%, bringing it back to 15%, effective July 1st, 2010.

From a business standpoint, it is believed that HST will create a more competitive marketplace for businesses. Most of the sales tax applied to items will be paid by the consumer, and as such the full amount should be more easily recoverable by the business, along with increased savings from an administrative standpoint. Businesses can remain competitive as companies who pay less tax will be able to invest more heavily in a larger workforce, new machinery and other capital goods. The end result expected is the ability to cut prices on what businesses manufacture.

The HST will eliminate the hidden PST when a business doesn't see a product through every stage of production. PST would have been charged several times throughout the lifecycle on an item before it reached the store shelf. A combined HST tax will result in lower prices for some products.

Some exemptions from HST:

  • Basic groceries
  • Prescription drugs
  • Some medical devices
  • Legal aid
  • Most financial services
  • Most health and education services
  • Child care

For more information about HST, visit and

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 general information, we are not experts in claiming for these other programs. In the upcoming issues, we will be highlighting some of these other grant and loan programs.

FEDNOR Applied Research & Development Program

Supporting commercialization of intellectual property increases competition for Northern Ontario private sector firms in mining, forestry, biotechnology, alternative energy, manufacturing and more. Contributions will normally not exceed 50% of eligible costs, up to a maximum contribution of $500,000. All assistance usually repayable.

NextGen Biofuels Fund Sustainable Development Technology Canada

Federal $500 million fund for the development and production of next generation renewable fuels in Canada. Up to 40% of project costs supported (up to $2 million per project). Repayable from cash flow over 10 years.

This is information of a general nature only; Northbridge does not necessarily assist 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;

I have been told that we need contemporaneous documentation to support our claim. What is contemporaneous documentation, and why do we need it?


Dear Valued Client,

The Canada Revenue Agency (CRA) defines contemporaneous documentation as “documents created at the time when the SR&ED work was done, and produced as a result of performing such work.” In layman’s terms, this means photographs, summary of meetings, sketches, drawings, prototypes, design of experiments, emails, conference calls, etc. These should all be kept and organized by project. This will have two positive effects:

First, in our experience, companies that have good documentation practices can easily expect two times larger claims than those without good tracking practices

Second, claim preparation time is significantly reduced, more accurate, claim reviews are considerably easier and completed much more quickly.

At this point, you may be thinking, “But we are already really busy; we don’t have time to write everything down!”

At Northbridge Consultants, we encourage our valued customers to keep detailed records of all activities, and can provide training and ongoing support to ensure the documents are sufficient and eligible for the SR&ED program. There is no need to implement a complicated tracking system that will burden employees and management. A straightforward approach, using notebooks or simple spreadsheets are sufficient to track hours and summarize eligible activities, establish technological advancement and describe the challenges and uncertainties encountered during the course of the project. When done regularly, it only takes a few minutes per week. Contact your local Northbridge Consultants team member today to learn how some simple steps can be implemented to ensure larger and easier claims without the red tape!

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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.