Liberal Party Promises SR&ED Reform
While rumours swirl about a fall election, political parties are putting out their position statements about economic policy. On Wednesday, September 1, 2021, the Liberal Party released their platform “Forward For Everyone” which included promises of Scientific Research and Experimental Development (SR&ED) Reform. The entire platform can be viewed here.
Details of platform
The Liberals promise to create an agency to further the development of Canadian-made technologies called the Canada Advanced Research Projects Agency (CARPA) which would be a counterpart to the United States Defense Advanced Research Projects (DARPA).1 Additionally, the Liberals are promising an initial $2 billion for the agency. The plan announced promises to:
- Reform the Scientific Research and Experimental Development Program to reduce red tape and the need for consultants, better align eligible expenses to today’s innovation and R&D, and make the program more generous for those companies who take the biggest risks, promoting productivity, new inventions, and the creation of good jobs.
- Establish a $75 million a year fund for colleges and universities to help commercialize leading research, including identifying and securing patent rights for research done within their institutions and connecting researchers with people and businesses to help put these innovations into action and grow our economy.
- Add 1,000 Canada Research Chairs to help attract and retain top talent at Canadian universities and support graduate research, with a focus on improving gender and racial equity among Canadian faculty, promoting inter-disciplinary research, and reinforcing Canada’s world leading capabilities in life sciences and bio-medical research.
- Move forward with our plan to invest in the Pan-Canadian Artificial Intelligence Strategy, supporting artificial intelligence innovations and research in Canada; investing in the Canadian Institute for Advanced Research to attract and retain top academic talent; providing dedicated computing capacity for researchers at the national artificial intelligence institutes; and advancing the development and adoption of AI standards.
- Establish a Canada Advanced Research Projects Agency (CARPA) as a public-private bridge for research that helps develop and maintain Canadian-led technology and capabilities in high-impact areas.1
Reactions to the announcement
Council of Canadian Innovators (CCI) executive director Benjamin Bergen released a statement in reaction to the Liberal Party’s 2021 election platform.
Our members welcome the promise to reform and modernize the scientific research and experimental development (SR&ED) tax credit, which is a cornerstone of the federal innovation funding system. We also appreciate the commitment to establish a permanent Council of Economic Advisors, which can build much-needed government capacity to remain engaged and proactive in fostering and regulating the evolving 21st century economy. With access to skilled talent the most pressing issue for all innovators in Canada, we’re pleased to see the platform include plans to improve the Global Talent Stream and expand pathways for permanent residency for skilled workers looking to make Canada their home. Talent remains the number one challenge for Canadian companies as they scale and grow their businesses abroad.3
Bergen also pointed out that the Liberal Party has held government for six years and innovation has declined. He called for continued support to “clean growth, research commercialization, and updated marketplace frameworks to regulate dominant foreign technology companies.”3 He asked that if re-elected the Liberal Party work in partnership with Canadian innovators to create a more prosperous Canada.
What does this mean for SR&ED?
As these are policy statements and contingent on who wins the next federal election, it is uncertain what this means for the SR&ED program. Reform to the SR&ED program may be a good thing but with little details on what is promised, it is difficult to say how it will benefit those conducting SR&ED eligible work. We will keep our readers posted of any definitive changes made to the SR&ED program and ensure that we keep them up to date on how this will impact their claims. For the analysis of the most recent federal budget, please see SR&ED in the Federal Budget: Innovation Support (2021).