CATAAlliance SR&ED Update (June 2008): Federal Budget Perspective, CATAnet TV on SR&ED. Post Budget Updates. and Next Steps
June 27, 2008

CATAAlliance SR&ED Update (June 2008)


-Federal Budget Perspective

-CATAnet TV on SR&ED

-Post Budget Updates

-Next Steps



Federal Budget Perspective:


Our last update focused on the Federal Budget released at the end of February 2008, including the commitment it contained for the Canada Revenue Agency (CRA) to make major improvements in their administration of the program.  Of particular importance, the Budget committed to improved redress processes, better trained reviewers and improved consistency and predictability.  An additional $10 million annually was given to the CRA as part of this commitment.  Given the Budget commitment, the critical issue was the CRA’s commitment and leadership.  We also noted CATA’s frustration with the Department of Finance for not looking at how they could help all parties by clarifying the legislation.  




For further perspective, please view, TV SR&ED interviews with CATA Senior VP, Tax and Finance, Russ Roberts:


CATA will also be producing additional training videos to assist companies with the SR&ED process.


Post Federal Budget Updates:

Since the last update, we have heard a great deal of skepticism from our members about the commitment to improving the administration of the program.  Members report hearing from some CRA officials that policies are being rewritten.  As well, they report that some CRA representatives are publicly taking new positions on well established policies and that review practices are becoming much more problematic.


The CATA SR&ED Team has met the staff of both Ministers and emphasized the community’s need for assurance that there is a real commitment for timely change and improvement.  We have been told that the Government intends this to be a commitment and that they are expecting improvement.  Ministerial staff emphasized that, given the economic climate, the additional $10 million annually reflected the Government’s degree of concern and commitment to the tax credit.  We have suggested that the community needs to see this commitment reflected in a formal action plan supported by Minister O’Connor that holds the Agency accountable.   We have been told that plans are being developed.


Also, with the encouragement of Minister Flaherty’s staff, we have worked with Department of Finance officials to put together a select working group of program and legislative experts to meet with Finance to discuss how the legislation could be refined to reduce the ongoing confusion and counterproductive impacts of certain areas of existing SR&ED legislation.  The areas being discussed include:


·         Definition of SR&ED set out in subsection 248 (1);

·         Contracts – who is eligible for the incentive?

·         filing deadline for claiming SR&ED (18-month rule); and

·        Use of normally kept books and records as the basis for allocating costs to SR&ED work.


Future updates will focus on these matters and widely circulated to the community.


Next Steps:


CATA is creating an SR&ED Practice Forum where the community can bring forward their experiences and seek suggestions and advice from others on practices that are more or less effective with the CRA.  Our aim is two-fold is to:


·        encourage the identification of best practices; and

·        identify and track administrative issues that we need to highlight in our discussions with the CRA


Additionally, we plan to conduct a survey in August/September to determine your experiences with the program and whether you have noted improvements.


Finally, in the near future we will be developing our concept for a CATA Centre of SR&ED Excellence,


++ Action Item: Executives with guidance or interest in CATA’s SR&ED Advocacy should contact Russ Roberts, Senior Vice President, Tax and Finance at "Russ Roberts" <>



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