Back in January, our BeneFACT company prediction was that the 2014 budget would be fairly light on mention of the SR&ED Tax Program. That point proved true on Wednesday, when the 2014 budget was tabled.

The Scientific Research & Experimental Development tax credit program (“SR&ED Tax Program” or “SRED”), was noticeably absent from this year’s budget (with the exception of one small mention in a table). What the budget did reflect on is more concentration on research & development and innovation in youth, employment and education. A few points covered included:

• Government recently completed consultations on an updated Science, Technology and Innovation Strategy and will release the updated strategy later this year
• Creating the Canada First Research Excellence Fund with $1.5 billion over the next decade
• Proposed $500 million over 2 years to Automotive Innovation Fund
• $50 million for the Agriculture Innovation Program to support development and commercialization of innovative new products, technologies, processes and services

IRAP was also mentioned briefly with $30 million to support youth internships in small- and medium-sized businesses undertaking technical research and development projects.

SR&ED Tax Budget 2014 Conclusions

One of the main ideas that this budget shows is that the funds saved from the SR&ED cuts over the past few years are being allocated to different areas of innovation and research; primarily to strengthen the bridge between education and corporation. Considering all of these SR&ED changes that have been implemented in the past few years, perhaps it’s not such a bad thing to be missed this time around.

You can read the 2014 Economic Action Plan in its entirety here.

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