CCI Response to SR&ED Policy Changes

For many years, CCI has been at the forefront advocating for major changes to SR&ED, and we participated in both rounds of industry consultation earlier this year. You can read our past policy submissions here and here.

Following the announced changes to the SR&ED program by Deputy Prime Minister and Minister of Finance Chrystia Freeland today in Toronto, CCI President Benjamin Bergen issued the following statement:

“The SR&ED reforms announced today by the Liberal government represent a long-overdue step toward strengthening Canada’s innovation economy. For years, CCI has been calling for action to address the challenges in our tax framework. While this announcement is welcome, and it moves to address some of the specific issues that we have been talking about in recent years, it must be the beginning, not the end, of SR&ED reform.

“We called for changes to the rules so that innovation tax credits don’t penalize small publicly traded companies, and we called for the government to increase spending thresholds. We’re pleased to see that the federal government is finally responding by enacting these common sense policies.

“SR&ED is by far the most important government incentive for innovation and research commercialization, and it is desperately in need of an overhaul. GDP per capita has barely moved in a decade, and the Bank of Canada is sounding the alarm on our national productivity emergency. Investment in R&D should be the engine of economic growth, but in no small part because of flaws in SR&ED, we have not seen the kind of investment that we desperately need.

"We had hoped to see the federal government take meaningful steps to stop subsidizing the R&D of foreign multinationals that contribute much less to the Canadian economy than homegrown companies, and we had hoped that the government would bring more transparency to SR&ED. More broadly, SR&ED reform needs to be one component of a larger strategic shift where Canada is more intentional about our national prosperity, and the use of industrial policy to ensure that we have leading innovative firms in high-value roles within the global economy.

“Canada is at a critical juncture. Enabling homegrown companies to scale and create new wealth in Canada is a big part of the solution. These reforms are a recognition of that reality and a testament to the tireless efforts of entrepreneurs who have championed this cause.

“We applaud the government for listening to concerns raised by CCI and the scale-up innovation companies we represent. We hope to see these reforms implemented effectively and immediately. We also urge continued efforts to refine and expand SR&ED to realize its full potential in supporting Canadian innovators."

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Media Contact:
James McLeod
CCI Director of Communications
jmcleod@canadianinnovators.org