News release

Federal plan moving ahead to improve incentives for SR & ED

Ottawa, March 10, 1999 Revenue Canada's action plan to improve its Scientific Research and Experimental Development (SRED) program is moving to full implementation, the Honourable Herb Dhaliwal, Minister of National Revenue and M.P. (Vancouver South-Burnaby) reported today.

"Our progress to date shows the strong commitment of my department and the Government of Canada to making the federal incentive program for industrial research and development fair, friendly, and client-centred," Mr. Dhaliwal said. "One of my key objectives as Minister of National Revenue is to make sure that this action plan for research and development becomes a reality."

Mr. Dhaliwal outlined a number of developments which illustrate the progress made since the action plan was announced in November, 1998.

• In less than one year, the backlog of SRED claims has been reduced by two-thirds.
• As part of the plan's objective to make the SRED program more client centred, Revenue Canada has named account executives to work with research-intensive companies in Vancouver and Ottawa. Also, the Department has made a preclaim review of research projects available in six Canadian cities. These reviews will be extended to all parts of Canada within the next year.
• Eleven representatives from technology-based industries have been named to a national steering committee that meets regularly to oversee the implementation of the action plan.
• Joint training has started in the aerospace industry and is planned for other industries.
• Revenue Canada has released a publication called A Guide to Conducting a Technical Review. This publication has been released to the field and is being circulated for consultation.
• Sector committees have been formed in 11 industries, including automotive, pharmaceuticals, software, oil and gas, communications, and chemicals. These committees will clarify eligibility issues and develop interpretation guidelines for the federal SRED tax incentives.
• In April, Revenue Canada expects to process almost all SRED claims within 120 days.

In addition, Mr. Dhaliwal confirmed that the Department will have an independent SRED directorate separate from other tax audit activities. The directorate will manage a program that channels about $1.3 billion into industrial research and development in Canada every year.

The Director General of this new SRED program directorate is Norine Heselton, Vice-President, Policy, Information Technology Association of Canada, who joined Revenue Canada on an executive interchange in January. Ms. Heselton is a former telecommunications executive and a past chair of the Ottawa-Carleton Board of Trade.

The action plan and SRED program information are available on Revenue Canada's Web site at: /sred

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Businesses interested in the SRED program should contact:

Jim Millen
Director
(613) 957-9390

18T/99