On March 19, the Liberal government announced the details of the 2019 Federal budget. One of the big surprises in the budget was the announcement that the program will be enhanced for CCPC going forward. Buried in the various innovation announcements, the government announced a change to the rules around accessing the 35% enhanced ITC rate for SR&ED. For fiscal years ending after March 31, 2019, the enhanced rate will be accessible to all CCPC regardless of taxable income, but still subject to taxable capital rules.
This change is specifically aimed at growing Canadian companies who have exceeded the $800,000 taxable income threshold which previously eliminated access to the enhanced ITC rate. Now companies can continue to scale up their companies without handicapping their ability to generate a profit. This initiative by the government is welcome, as it puts Canadian companies in a stronger position to compete globally and incentivize companies to continue their R&D efforts even after achieving a product-market fit.
At MCN, we work with clients to put together a comprehensive R&D strategy. With our team of researchers and former technology executives, MCN can provide insight and structural advise in how to position your R&D efforts to maximize their eligibility under various programs. Rather than passively look at the work performed, companies can leverage MCN’s in-house technical expertise to design and augment SR&ED projects to ensure compliance, eligibility and return on your R&D investments.