Symbol of the Government of Canada

Common menu bar links

Concerned Technology Executives In Canada

Submission — Concerned Technology Executives In Canada

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): Ali, Wajid; Baker, John; Bar-Haim, Ben; Coady, John; Hull, Sarah; O'Neill, Chris; Ossip, David; Smith, Gerry; Smyth, Derek J.

Summary: A multitude of Federal direct funding and tax incentive programs exist to promote innovation and research and development in Canada, however, Canada's adoption of technology, its productivity rate, and the proportion of revenue spent on R&D by business continues to lag. Based on our experiences and perspectives, we believe there are several contributing factors, including:

  • Challenged playing field on eligibility for funding R&D projects based on the ownership structure and size of the entity, versus the nature of the project or its potential job creation.
  • The qualifying criteria for certain significant funding programs, such as SR&ED, not keeping pace with changes that perhaps support a different definition. This includes currently non-qualifying intellectual property/innovation activities that are value-creating, which often yields significant job creation for Canada.
  • Often cumbersome, complex and disparate application and audit processes for obtaining and monitoring compliance with funding projects.
  • Lack of a clear intended role for each major program within the overall mandate, including a clear line of sight between the objectives of the program and the measurable results obtained
  • Direct support for individuals/companies that create and maintain jobs in R&D in Canada
  • Nature of funding (tax credit vs. above EBITDA funding) can influence decisions on whether an R&D project is performed in Canada or elsewhere.

We agree that it is time to revisit existing programs given the objectives of creating jobs and wealth in Canada. This can be achieved by maximizing the potential of the private sector to rank among the world's innovation leaders. We must do this in the context that we operate in an open and global competitive environment. We also advocate that the ICT sector is quickly becoming a foundation of competitive advantage across all sectors, such as improved productivity in manufacturing, and driving the Digital Economy.

Our core observations and recommendations to the Panel include:

  • Focus more on the value of eligible R&D/innovation to Canada and not whether the claimant is a Canadian-owned/domiciled or private/public company.
  • For the major programs, consider amending the definitions of qualifying activities to include recognition of knowledge-based innovation. Certain programs such the Digital Media Tax Credits in Ontario and other project-based funding programs have attempted to fill this gap, but it is not as broad or streamlined within the federal program portfolio.
  • More programs/funding for go-to-market/commercialization activities, such as customer pilot programs and business development expenditures, to maximize commercial prospects of qualifying projects. Explore whether exemplar programs exist in the private sector for this.
  • Aim for streamlined, cost-effective programs which are administered on a timely basis and take into account the 'life-cycles' of various new technologies/innovation (e.g. the different timing and levels of investment required to commercialize whether you are creating a basic application vs. a new airplane). The often significant period between a company's investment in a project and the application, filing and receipt of funding for a program claim does not optimize incentives to invest in R&D. Consider quarterly claim filing options as well.
  • Tangible results should be clearly aligned with the objectives of each program e.g. number of jobs created, patents obtained, commercialization of product, improved skills, or increased adoption of technology or productivity. Innovation/R&D in-and-of-itself is not the end game.
  • Encourage Canadian companies to embrace and leverage new Canadian technologies, possibly through expanded capital cost allowances, or the provision of direct incentives for purchases/adoption.
  • Programs to create a culture and education system which better promotes innovation among the young, competitive intensity and appreciation of cross-disciplinary/higher level training.

Full submission: PDF Version