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A PDF summary of the highlights can be accessed here.
Federal Minister of Finance James M. Flaherty delivered the Conservative
government’s 7th Federal Budget on Thursday March 29, 2012.
The 2012 Budget marks a major change in how the federal government will move
forward in funding research and development (R&D) in Canada as well as assisting in
the commercialization of research and development in Canada.
The Jenkins Panel issued a report in October 2011 that suggested many changes to how the federal government should fund Canadian R&D as well as suggested changes to the flagship Scientific Research and Experimental Development (SR&ED) program. The 2012 Budget indicates that the government will provide $1.1 billion for direct research and development support, as well as $500 million for venture capital initiatives. Approximately $1.3 billion of this new funding will be taken from the SR&ED tax incentive program and distributed across a variety of funding programs as follows:
Support for Research, Education and Training
In addition to the above, the Budget proposes to provide additional resources to
support advanced research at universities and other leading research institutions as
Specific Changes to the SR&ED Program
As suggested by the Jenkins Panel, the federal government has proposed a number
of changes to the SR&ED program in an attempt to make the program more cost effective
and to streamline the compliance and administration efforts of business and
the Canada Revenue Agency (CRA). The changes are divided into two categories:
Changes to the Calculation of SR&ED
Please refer to the appendix at the end of this document for a calculation of the
SR&ED tax credit changes by province.
The government will spend $6 million over the next two years to implement changes
to the administration of the programthrough the following measures:
The above initiatives complement the SR&ED policy review project currently
underway, which will consolidate and clarify the administrative policies that are
contained in about 70 documents pertaining to the SR&ED tax incentive program.
The budget also announced that the government would conduct a study, including
consultation with taxpayers, to better understand why companies choose to hire
consultants on a contingency fee basis to prepare their SR&ED claims. The result of
this study will determine whether any action is required.
This communication contains a general overview of the subject matter and is
current as of the date of publication. The information should not be regarded
as a substitute for professional advice. MNP LLP accepts no responsibility for
any loss or damage caused by your reliance on information contained in this
Related Topics:Budget Announcements; Scientific Research and Experimental Development
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