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EVERYTHING YOU NEED TO KNOW ABOUT IRAP FUNDING - Including SR&ED Presented by Ron Matheson, Advisor – Concierge Service at National Research Council and Jeff Christie, Partner - Boast Capital November 26, 2015
OUTLINE
I. Overview of the Concierge Service
II. IRAP Program
III. Q&A
IV. SR&ED
NATIONAL RESEARCH COUNCIL CANADA INDUSTRIAL RESEARCH ASSISTANCE PROGRAM
Supporting SME growth through innovation and technology
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NRC MISSION • Working with clients and partners, we provide innovation support, strategic research, scientific and technical services to develop and deploy solutions to meet Canada’s current and future industrial and societal needs. •
NRC-IRAP MISSION • Accelerate the growth of SMEs by providing them with a comprehensive suite of innovative services and funding
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Delivered by a network of over 400 professionals located in more than 100 communities across Canada
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How we serve • Provide advisory services
• ITAs, Concierge Advisors (new)
• Offer strategic, competitive, business intelligence
• Promote networking and linkages with potential partners in Canada and abroad
• Enable non-repayable financial assistance
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How to become a client
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If your company meets all of the following criteria: • small-or medium-sized firm (fewer than 500 full-time
employees)
• located in Canada
• incorporated and profit-oriented
• want to grow through development and commercialization of innovative, technology-based products, services, or processes in Canada
Your company may be eligible for support
1. Eligibility
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2. Meeting at your company’s site An Industrial Technology Advisor (ITA) will visit you at your location to better understand • Your business structure (ownership, management, etc.) • Your business strategy • The nature of your activities (products/services, clients, competitors…) • Available resources (human, material, etc.)
You will • Discuss how NRC-IRAP can help you achieve your business goals • Learn more about the variety of NRC-IRAP services and programs • Oversee the conditions for financial contribution support
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3. Project definition
• Definition of the business opportunity
• Identify the client’s needs
• Decision to “buy” vs. “develop” new technology
• Define the project’s objectives, resources, timelines, deliverables, etc.
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4. Proposal for financial support Your proposal must:
• Provide an overview of your business
• Contain a clear description of the activities necessary to achieve your project
• Identify clear and measurable objectives
• Elaborate a realistic budget that is coherent with your project’s activities and resources
• Identify other sources of financing, if necessary
Your ITA will provide you with an online template
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5. Proposal evaluation Project assessment:
• Understanding the business opportunity
• Evaluating the firm and its capabilities
• Assessing the project content and technical risk Determining the financial contribution level for all costs: • What activities are required to accomplish the project?
• What are the expected results?
• What is the overall cost of the project?
• What portion of the project does NRC-IRAP support?
• Are the project costs reasonable?
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6. Project management and follow-up
Your ITA will work with you from start to finish:
• Offer support throughout the life of your project
• Ensure you reach your ultimate technical and business objectives
• Follow-up to ensure you maximize the commercial benefits resulting from your project
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0%
5%
10%
15%
20%
25%
30%
35%
40%Aerospace
Agriculture&Food
Construction&Related
EnergyandEnvironment
Health&LifeScience
ICT(DigitalEconomy)
Manufacturing&Materials
Others
Our clients by industry sector
Year 2012-2013
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Impact
FINANCIAL NRC-IRAP $1 $10 revenue for the firm
ROI NRC-IRAP $1 $12 economic impact
JOBS 8,500 high quality jobs supported yearly
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Who to contact?
Ron Matheson – Edmonton Centre Concierge Advisor: Tel: 780 429-6363, ext 227 Email: [email protected] Karl Miller – Calgary Centre Concierge Advisor: Tel: 403 299-8014 Email: [email protected]
OVERVIEW OF THE SR&ED PROGRAM
WHAT IS SR&ED?
APPLICABLE INDUSTRIES
QUALIFYING CRITERIA
Must meet three criteria to qualify for SR&ED:
1. Technological Challenges 2. Technological Uncertainty 3. Technical Content or Iterations
ELIGIBILITY The CRA’s 5 questions: 1. Was there a scientific or a technological
uncertainty that could not be removed by standard practice/engineering?
2. Did the effort involve formulating a hypothesis
specifically aimed at reducing or eliminating the uncertainty?
Continued…
ELIGIBILITY 3. Was the adopted procedure consistent with the
total discipline of the scientific method, including formulating, testing, and modifying the hypothesis?
4. Did the process result in a scientific or
technological advancement? 5. Was a record of the hypothesis tested and
results kept as the work progressed?
SR&ED BENEFITS
WHO CAN CLAIM?
SMEs = defined as generating less than $500K taxable net income in the prior fiscal year.
SR&ED BENEFITS Return rates for SME CCPCs:
SR&ED BENEFITS Return rates for non-CCPCs:
CRA REQUIREMENTS
TECHNICAL DOCUMENTATION
CRA requires that SR&ED documentation must: § Have been documented at the time the work was
completed § Highlight technical obstacles or challenges § Be dated
TECHNICAL DOCUMENTATION § Most important thing is to document the technical challenges/obstacles as the work progresses.
§ Capture: the problem and the iterations undertaken to attempt to resolve the problem
§ What are the different hypotheses and how was each hypothesis tested?
TIME TRACKING
FINANCIAL STATEMENTS
WHEN TO CLAIM?
18 Months Past Fiscal Year End § Current Claim = Within 6 mo § Amended Claim = Within 7 to 18 mo
TURNAROUND TIMES
From receipt of a complete claim:
§ CCPC Current Claim – 4 months § CCPC Amended Claim – 8 months § Non-CCPC Claim – 12 months
CRA REVIEWS
CRA Review ≠ Tax Audit Multiple types of Reviews:
§ Desktop § Financial § Technical & Financial § First Time Claimant Advisory Service (FTCAS)
JEFF CHRISTIE PARTNER 403 589 2809 | [email protected] BoastCapital.com | @BoastCapital | @ChristieLuge