News release

Revenue Minister announces action plan to improve the Federal Scientific Research and Experimental Development (SRED) Program

OTTAWA, November 5, 1998...The Honourable Herb Dhaliwal, Minister of National Revenue and M.P. (Vancouver South-Burnaby), today releases Revenue Canada's action plan designed to improve its Scientific Research and Experimental Development (SRED) Program.

The SRED Program provides broadly based support for research and development in every industrial sector in Canada. In 1997, about $1.3 billion in assistance was provided to over 11,000 participants through the program. The number of claimants has continued to grow at a rate of 13% a year since the beginning of the program in 1985. The Government is committed to maintaining this growth and to securing Canada's leadership role in innovative research and development.

The action plan is Revenue Canada's direct response to the recommendations of a recent SRED conference that brought together more than 70 representatives from industry associations and companies. The aim of the Revenue Canada conference was to work together with industry to improve the SRED Program, as well as to ensure industry's continued participation in the program's administration.

The plan contains 13 actions based on industry's recommendations. One key activity has already been implemented through the creation of the Action Plan Steering Committee, which will prioritize the steps needed to improve the SRED Program. Other key actions include:

• Representatives of the private sector and Revenue Canada will jointly create sector-specific committees to clarify SRED eligibility issues and to develop interpretation guidelines.
• Revenue Canada will re-organize its SRED Program to focus on science and incentive aspects, and make the program independent of the Department's Audit Directorate.

"This Government understands the importance of tax incentives to the critical role of research and development in our economy. Continued investment in research and development is necessary if Canada is to remain competitive in the global marketplace," said Minister Dhaliwal. "Working to improve all aspects of the SRED Program will help to ensure strong levels of this type of investment well into the future."

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

For media information, contact:

Colette Gentes-Hawn
Media Relations
Revenue Canada
(613) 957-3522

Tom Balfour
Office of the Minister of National Revenue
(613) 947-7299

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