Symbol of the Government of Canada

Common menu bar links

Canadian Society for Senior Engineers

Submission — Canadian Society for Senior Engineers

Important note: The content of submissions and summaries is the sole responsibility of the person and / or organization having made a submission. The posting of this content does not indicate that the Panel supports or endorses it. Submissions and summaries are posted in the language provided without modification.

Submitter(s): Putt, Ken

Summary: Major Actionable Recommendations

1) Modify the Income Tax Act of Canada to permit flow through shares for Canadian Corporations (CCPC's and Public Companies) conducting Research, Development and Innovation (RDI) in Canada applicable for tax credits conveyed by issuance of new shares to individual investors.

Small and Medium-sized Enterprises (SME's) have difficulty raising capital to finance their RDI/BERD activities. Moreover, many are in a non-taxable position and do not need to deduct their RDI expenses. The Flow Through Share (FTS) mechanism allows the issuer corporation to transfer the RDI expenses to the investor. An SME, in particular, benefits greatly from FTS financing. The FTS program provides tax incentives to investors who acquire FTS's by allowing: deductions for RTI expenses renounced by eligible corporations; and SR&ED tax credits for individual (excluding trusts) on RDI expenses in all industrial sectors that qualify as flow-through RDI expenditures. The Canada Revenue Agency (CRA) would review all FTS arrangements and Audit them.

2) Recognize not-for-profit 4th pillar (Government, University, Business, Independent Not-for Profit) research facilitation organizations, such as the Petroleum Technology Alliance Canada (PTAC), with Independent Boards of

Directors and high levels of Corporate Governance who's membership includes all key stakeholders, as authorized approval agents to administer Government RDI funding of importance to that industrial sector, much as is done by SDTC. Canada Revenue Agency (CRA) would review RDI funding arrangements after completion and Audit them.

Full submission: PDF Version