SR&ED Government Programs for Manufacturers - Post Event Follow Up

Manufacturing is a sector where ideas are given form and innovation is commonplace. As leaders in this space, you are constant drivers of progression and growth, continuously making advancements in all industries through your tireless efforts.

In recognition of the role Canada’s manufacturing businesses play in the country’s economic landscape, both federal and provincial governments offer a number of Funding Opportunities, both in the way of Tax Credits and Grants. Scientific Research and Experimental Development (SR&ED) and the many Grants fund opportunities to further stoke creativity and ideation in this space. By taking advantage of these opportunities, manufacturers can support and subsidize many aspects of their business including Product and Process Development, Market Growth, Employee Development, Business Growth/Expansions, etc. sharply reducing financial risk and fully realizing their organization’s potential.

One of the best ways to access financial support for these activities is through the SR&ED federal tax credit. These credits are administrated directly by the Canada Revenue Agency, and are specifically designed to foster economic growth and offset research and development risk in the manufacturing sector. Two different forms of federal SR&ED tax credits are available to Canadian manufacturers — “Enhanced” and “Basic”. The former provides refundable tax relief for up to 35% of SR&ED activities for Canadian-controlled private corporations that have not met their taxable capital or small business deduction limits. The latter offers non-refundable SR&ED tax relief of up to 15% for companies that are foreign-owned, public, proprietorships or partnerships, or have exceeded their small business or taxable capital deduction limits. Provincial governments also offer a unique tax credit that can be used in conjunction with federal support for SR&ED operations conducted in their respective provinces. By utilizing the tax benefits, manufacturers can financially support their product and process development efforts.

In addition to the SR&ED Tax Credit Program there are many Federal and Provincial Grants to support not only major players in the manufacturing space but for SME as well. An example, is the Canadian National Research Council’s Industrial Research Assistance Program (IRAP). IRAP is a non-repayable grant available to businesses with less than 500 employees. IRAP grants are offered by a team of Industry Technology Advisors located across Canada, and provide resources specifically-tailored for cutting-edge manufacturing innovation through investment in specialized technology, direct labour, and professional expertise. Also available to businesses of varying sizes are Canada’s regional development agencies, which promote effective expansion and upscaling operations through repayable interest-free loans. Each of these resources provides growth opportunities to organizations of all types across the country, further securing the manufacturing sector’s diversity and consistent evolution.

Innovation is vital to success in manufacturing — customers reward businesses at the forefront of technological progress, and breakthroughs in product development often lead to drastically increased efficiency. Now, through the vast array of funding opportunities provided by governmental organizations, it has never been a better time for manufacturers to take risks, innovate, and discover new ways of achieving their goals. In doing so, they gain significant competitive advantages and the ability to expand their businesses.

For future discussions on the topic of Government Funding, both Tax Credits and Grants, contact Craig Mannell, EMC’s Manufacturing Consortium Manager for Niagara, Hamilton, Burlington, Oakville, Owen Sound & Area or Ross Cooper, Senior Advisor – Value Added Programs. Attend EMC events frequently for knowledge and expertise supporting the Canadian manufacturing sector.