But the good news about Canadian innovation has been appearing across many industries including: manufacturing, agribusiness, sustainable energy development, software development and more.
Canada’s thriving growth in innovation is in part attributable to the research and development support available. The scientific research and experimental develop program (SR&ED), the largest and best known example, is a generous R&D tax credit incentive offered by the Federal Government of Canada. The program pays more than 20,000 eligible Canadian Controlled Private Corporations in excess of $3 Billion CDN each year.
The question is, is your company one of over 58% of companies who are not taking advantage of R&D funding opportunities?
In this article, we will demonstrate the results of taking advantage of the opportunities available through two recent SR&ED examples.
Sustainable energy is an industry that by its very nature is constantly looking for ways to innovate. Our example is about a company that created a different version of a windmill, and in the process, generated $245,000 in SR&ED funding.
What was different about this windmill is that it used sails instead of blades used in traditional windmills to generate power. These sails collected more wind than blades thereby generating more power. Further power generation was achieved by putting solar panels on the frame of the windmill.
To create additional revenues, the new technology allowed the company to incorporate paid for advertising on the sails, which was readable from short and long distances.
This windmill company was able to successfully claim SR&ED based on their employee’s salaries who were involved in the R&D, the subcontractors they hired to help with design, engineering, renewable energy certifications, all of their prototyping costs, and the cost of materials consumed or transformed.
As the company continues to develop larger sized windmills, and to improve the sails / solar panels performance, they will be able to claim SR&ED on an ongoing yearly basis.
Agribusiness is another industry which shows a constant influx of innovation through research and development activity. A greenhouse sod company was able to obtain $130,000 in SR&ED funding by coming up with a new way to grow sod, which was easier to water and fertilize while it was being grown, and easier to harvest when ready for sale.
The advance in technology which allowed for growing sod in this manner, was based on a patented method of growing the grass on plastic, instead of on soil. The plastic made it every quick and easy to peel the grass off the plastic instead of the standard harvesting methods used by traditional soil sod farms. In addition water and fertilizing was much easier, quicker and required less product, because the sod was grown on off-ground racks.
This sod farm was able to successfully claim SR&ED for their employee’s salaries who were involved in the R&D, the subcontractors they hired to help with design, engineering, environmental certification, all of their prototyping costs, and the cost of materials consumed or transformed.
SR&ED will continue to be claimable every year as they test different types of plastics, growing racks, water / fertilizer combinations, and the growing of other things in addition to sod.
Enhanced Capital Recovery can help you maximize your research and development funding opportunities and explore all possible avenues. Contact us today for a free consultation!