Tuesday’s provincial budget may not have been long on goodies and gifts, but it did provide a break for the province’s innovation-driven companies.
Finance Minister MIke de Jong announced the province will extend the Scientific Research and Experimental Development (SRED) tax credit for an additional three years until September 2017.
The program, a federally administered tax incentive program, is designed to encourage Canadian companies to conduct research and development in Canada.
The province offers its own credit on top of the federal initiative.
“It’s significant, as SRED is one of the key things the government does to support the tech sector, its support is something most companies would say is vital,” said Dan Gunn, executive director of the Victoria Advanced Technology Council. “The SRED credit allows those companies to do research and development they may otherwise not be able to afford,” he said of the region’s $3 billion tech industry.
According to provincial Finance Ministry figures the tax credit was worth $154 million to B.C. companies in 2013-14, with expectations it will represent about $99 million in 2014-15 and $180 million in 2015-16.
Companies can claim the credit for expenditures related to wages, materials, machinery, equipment and some overhead.
“It’s certainly significant for us,” said Scott Phillips, CEO of Starfish Medical, which engineers medical devices. “We encourage our Canadian clients to take advantage of SRED and for many of them it's critical to their survival in their startup stage.”
Phillips also noted a subsidiary of Starfish, ViVitro Labs that provides cardiovascular test equipment and consulting services, has made good use of the credit.
“Having SRED has allowed ViVitro to invest in research and development to stay competitive in the global cardiovascular industry. We anticipate significant employee growth in Victoria in this division as we continue to expand our product and service line,” he said.
