INNOVATION FUNDING FOR GROWTH-ORIENTED COMPANIESFebruary 3, 2015

SR&Education: Everything You Need To Know to Claim SR&ED Tax CreditsFebruary 3, 2015Presented by Jeff Christie

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WHAT’S SR&ED?

Scientific

Research

&

Experimental

Development

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SR&ED FUNDING

In 2013, the CRA

provided $3.4B of

investment tax

credits (ITCs) to

22,000 companies

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SR&ED ELIGIBILITY

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SR&ED ELIGIBILITY

1. Was there a scientific or a technological

uncertainty that could not be removed by

standard practice/engineering?

1. Did the effort involve formulating a

hypothesis specifically aimed at reducing

or eliminating the uncertainty?

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SR&ED ELIGIBILITY

3. Was the adopted procedure consistent with the total discipline of the scientific method, including formulating, testing, and modifying the hypothesis?

3. Did the process result in a scientific or technological advancement?

3. Was a record of the hypothesis tested and results kept as the work progressed?

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EXAMPLES

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WHO CAN CLAIM?

CCPC = Canadian Controlled Private

Corporations

Non-CCPC = Foreign or Publically

Owned Corporations

Partnerships

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WHAT CAN YOU CLAIM

Non-arms length subcontractors

*Salaries and sub-contractors MUST be Canadian tax payers

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CCPC AND SME

SME = Small to medium sized enterprise generating less

than $500K in taxable net income in the prior fiscal year

ITCs are refundable ($$$)

* Salaries and sub-contractors MUST be Canadian tax payers

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ITCs are non-refundable

ITCs can be carried back 3 years or forward

indefinitely

NON-CCPC or LARGE CCPC

* Salaries and sub-contractors MUST be Canadian tax payers

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OVERHEAD

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DOCUMENTATION - TECH

Documented at the

time the work was

completed

Technical obstacles

or challenges

Dated

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DOCUMENTATION - TIME

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DOCUMENTATION - $$$

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HOW TO FILE

Claim is submitted with your corporate tax

return

– One set of tax schedules for Federal

– Another set of tax schedules for Provincial

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WHEN TO CLAIM?

18 Months Past Fiscal Year End

Current Claim = Within 6 mo

Amended Claim = Within 7 to 18 mo

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CRA REVIEWS

CRA Review ≠ Tax Audit

Multiple types of CRA Reviews:

First Time Claimant Advisory Service (FTCAS)

Desktop

Financial

Technical & Financial

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THE DO’S AND DON’TS

Do’s for Companies:

Pay yourself and staff

Start time tracking and proper

documentation now

Incorporate your company and

ensure clear IP ownership

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THE DO’S AND DON’TS

Don’ts for Companies:

Underestimate the importance

of documentation

Focus on the business

opportunity

Leave your SR&ED claim until

the last minute

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HOW WE WORK

Contingent

Scope your claim upfront and invoice when your claim is

successful

Efficient

Only require interviews & documentation

Proactive

Ongoing engagement and future recommendations

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WHY WORK WITH US

Highly reputable

Technology-

focused

Efficient

Well-connected

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JEFF CHRISTIE

PARTNER

403 589 2809 | jchristie@boastcapital.com

BoastCapital.com | @BoastCapital | @ChristieLuge

For more info on R&D tax credits and other innovation funding programs,

subscribe to our newsletter.

www.mitacs.ca 25www.mitacs.ca

Delivering innovation

through research and

development

Eric Loo, PhD

Business Development Specialist

February 3, 2015

Boast Capital

Innovation Funding Lunch and Learn

www.mitacs.ca 26

Agenda

Why Mitacs?

Talent supply chain

Research outcomes

Mitacs programs

Contact information

www.mitacs.ca 27

Why Mitacs?

National research network15 years in operation37 research partners61 university partnersAlmost 10,000 research projects to solve business problems and drive innovation

www.mitacs.ca 28

Annual snapshot

Why Mitacs?

www.mitacs.ca 29

The Mitacs network

Why Mitacs?

Small & medium business

Large business

Start ups

Multi-nationals

Not-for-profits*

Computer science

Engineering

Anthropology

Economics

Chemistry

Geography

Health sciences

Genetics

Social work

Forestry

History

Languages & linguistics

Mathematics

Business

Education

Interactive arts

Psychology

And more…

www.mitacs.ca 30

Research talent supply chain

Why Mitacs?

Attract Train Retain Deploy

Best and brightest

research talent

With industry-ready skills and

experience

Talent locally to enhance

Canadian industry

Researchers to drive innovation

outcomes

www.mitacs.ca 31

National news coverage

Why Mitacs?

www.mitacs.ca 32

Program growth

Why Mitacs?

0

500

1000

1500

2000

2500

18 30 85 170 240

675

1060

1544 1576

2109

Mitacs

research

projects

www.mitacs.ca 33

Business Advantages

Why Mitacs?

Access expertise not currently in-house

Leverage R&D budget and claim SR&ED tax credits

Gain a competitive advantage

Tap into a national research network

Develop IP

Researchers paid by Mitacs: not a company employee

Pipeline for recruitment of talent

Mitacs assistance throughout application process

Industry

Industry

International

Academic

www.mitacs.ca 34

Research Outcomes

Pulp mill saves $40,000/year

Robotics company enhances drone aircraft camera prototype

Biotech firm commercializes one-step food testing kits

New generation greenhouse lighting results in higher crop yields

Enhanced GPS navigation technology commercialized

Improved chat room filter to improve internet security

Why Mitacs?

www.mitacs.ca 35

Building research collaborations

Large-scale, multidisciplinary projects

From $15,000 to $2M+

Development of IP

Top research talent

Matching funding

Scalable projects

Quick application – 6 week approval

www.mitacs.ca 36

Standard buildMitacs Accelerate

$10,000minimum intern

stipend

$5,000other project-related

expenses

$7,500Mitacs

$7,500Industry

$15,000Over 4-6 months

• Grad student (MSc or PhD) and Postdocs

• Clearly defined project objectives

• 50/50 time commitment at both the industry and academic sites

• Ensure active collaboration

• Multiple Internships – 2 max per Masters Student

– 6 max per PhD Student

– 6 max per Post-Doc

www.mitacs.ca 37

Scalability: build large-scale projects,

“clusters”

First 1 to 5 internship units: industry funding matched 1:1

Mitacs Accelerate

6 internships $80,000 (cluster) $44,000 from Mitacs, $36,000 from partner. Minimum 3 interns.

Access researchers from multiple disciplines for the same research project

4 months 4 months 4months 4 months 4 months 4 months

www.mitacs.ca 38

Cluster buildMitacs Accelerate

• Extra leverage for medium to large projects

• Higher ratio of funds matching

• Minimum 3 students

• Can be split among different research groups

• Scalable: each additional $18K from industry generates $22K from Mitacs

$80,000$36, 000 Industry$44,000 Mitacs

$10,000Stipend

$20,000other project-related

expenses

$10,000Stipend

$10,000Stipend

$10,000Stipend

$10,000Stipend

$10,000Stipend

www.mitacs.ca 39

Three-year PhD Fellowships

Long-term research collaboration

$90,000 in total funding

$25,000 stipend + $5,000 research costs annually

Peer-reviewed, open to all disciplines and international students

Professor may recruit PhD after project approval

Next call opensEarly 2015

Annual: $12,000 from partner, $18,000 from Mitacs = $30,000 total grant.

www.mitacs.ca 40

Partners

Business with facilities in Canada

Domestic or foreign-owned

May include– Utility providers

– University spin-offs

– First Nations development corporations

– Industry associations

NGOs, not-for-profit, foundations, industry based research collaborations

Mitacs Accelerate

www.mitacs.ca 41

Two-year projects

Postdoctoral expertise

Leveraged funding

Relationships with experts

Evaluation of potential employees

Access to specialized software and equipment

Develop in-house R&D capacity

Next callEnd of March

www.mitacs.ca 42

$50,000

$7,500

$57,500

Mitacs Elevate Annual Funding cycle

Mitacs Elevate

www.mitacs.ca 43

Our Funding Partners

www.mitacs.ca 44

Next Steps

Contact me to discuss research goals:

Find a local representative:

mitacs.ca/accelerate/contact-us

Eric LooBusiness Development Specialist

Mobile: 587-335-3778Email: eloo@mitacs.ca

Feb 3, 2015

Page X

• Customized guidance from expert advisors

• Informationon funding and support

programs

• Quick assistance

and referrals

Concierge Service – Your Guide to Innovation

Page 4

Innovative SMEs

Concierge Service

Federal Innovation Programs/ Services

Provincial Innovation Programs/ Services

Regional Innovation Programs/ Services

Local Innovation Support

Canada Business Network

Concierge Service Partnership Model

Website

Concierge

Advisors

Client

Contact

Centre

Page 7

Timeline: Evolution of the Concierge Service

1. Government Programs

2. Expert Information

3. Equipment and Facilities

4. Global Opportunities

• Expanded services progressively phased-in

•Call our bilingual client contact center

1-855-53-GUIDE (1-855-534-8433)

Hours of operations: 7:30 AM to 7:30 PM EST

Monday to Friday

•Visit our website

Our online database provides initial information on some

of the programs and services that are available:

www.concierge.portal.gc.ca

Page 9

How to reach the Concierge Service

NRC-IRAP

• Advisory Services & Funding Through an Industry Technology Advisor (ITA)

• IRAP = Industrial Research Assistance Program

• BIAP = Business Innovation Access Program

• YEP = Youth Employment Program

• CMC Canada joint program

• SME Canada joint program

• CTO = Contribution to Organizations

NRC-IRAP

• IRAP typically funds 80% of R&D personnel costs for a project to a max of 50% of total project costs

• Small projects typically an Abbreviated Review Project (up to $50k) requiring about a month

• Larger projects (> $100k contribution) have a more involved due diligence process requiring 1-3 months to complete

NRC-BIAP

• Funding up to $50k over a 3-6 month period for work done at public R&D institution (e.g. NAIT, UofAB, Red Deer College, NINT, etc.)

• Covers 75% of total project costs

• Work is often access to specialized knowledge and equipment not available to the SME

NRC-YEP

• Youth Employment Program provides a non-repayable grant for a new technical hire (recent grad)

• Grant (approx. $18k) paid monthly over 6 months

• Application through ITA with turnaround of 10 working days

IRAP-CMC Canada

• Provides up to $5k for a CMC certified consultant to undertake a strategic project with SME

• Example projects: ERP system, manufacturing process change implementation, market expansion, etc.

• Nominal registration fee of $150 for the SME

IRAP-SME Canada

• Subsidized access to a bench-marking service

• Value of approx. $1250 with nominal registration fee of $150 for SME

• Allows SME to compare its productivity (various measures) with comparators throughout N. America over time

IRAP CTOs

• Contribution to Non-Profit NGOs where alignment of objectives is achieved

• Typical grants are to industry associations, incubators/accelerators, economic development agencies

• Local Examples: TEC Edmonton, Leduc-Nisku, Regional Business Accelerator- Lloydminster, Wood Buffalo RBA, BioAlberta, etc.