INNOVATION
The Power of a GOOD INCENTIVE
His C-Leg prosthesis has been improving people’s lives ever since it hit the marketplace in the 1990s. Kelly James, P.Eng., has continued inventing orthotic equipment — although without the federal Scientific Research & Experimental Development Program, he probably would have retired years ago
BY CORINNE LUTTER Member & Internal Communications Coordinator
“In today’s business environment, it’s important that all applicable incentive plans are accessed to help fund ongoing research and development,” says Dr. Vela-Estrada. Still, many companies aren’t taking advantage of the program, even though they’re eligible. “Some companies may think they’re too busy to apply. Others simply don’t know about it. There’s a large range of reasons why they don’t file claims.” The program is structured to favour start-ups and small to medium-sized, Canadian-controlled private corporations (CCPCs) — ones that conduct R&D into new, improved, or technologically advanced products, processes, devices, and materials. Statistics from 2014 show that about 75 per cent of claims were from small to medium-sized CCPCs, Dr. Vela-Estrada says.
He’d like to retire, but Kelly James, P.Eng., just can’t come up with anything that turns off his inventor’s switch. Since the arriv- al of his revolutionary prosthetic leg in the early 1990s — the first to use a computer chip to control a leg’s hydraulics — the applied scientist has continued to invent life-changing orthotic equipment for people with physical disabilities. His first invention, the C-Leg, was funded by medical grants when he was a researcher at the University of Alberta. But since striking out in 2004 to start his own firm, Biomech Engineering Ltd., he’s had to bankroll his projects to shift them from the development stage to the marketplace. Fortunately for him, tax credits from the federal Scientific Research & Experimental Development Program (SR&ED) have been there to help him turn ideas into wonderful realities. “The SR&ED program pays me to use my brain,” explains Mr. James, a mechanical engineer. “It’s a cheque at the end of the year that I get for developing prototypes of my new ideas.” “If the program wasn’t around, I probably wouldn’t continue doing this,” he says. “But it makes me solidify my engineering tasks, document, and really think about a project.” SR&ED is Canada’s largest tax incentive program aimed at encouraging business research and development. Administered by the Canada Revenue Agency (CRA), it provides more than $3 billion in incentives each year to about 20,000 claimants — from small businesses like Biomech Engineering to major corporations. For many companies, an SR&ED refund is a big part of annual budgets. “A lot of companies rely on the program to reinvest that money and continue their R&D work,” notes Calgary-based Jesus Vela-Estrada, P.Eng., PhD. He’s an SR&ED Manager at Grant Thornton, an accounting and business advisory firm that helps companies — including engineering and geoscience firms — navigate the SR&ED claim process.
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THE SR&ED UMBRELLA
Eligible projects fall under: • experimental technological advancements to create or improve materials, devices, products, or processes • applied or basic research to advance scientific knowledge, with or without a specific practical application in view • qualifying support work such as engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, and psychological research Non-eligible activities include marketing and sales, routine testing, research in social sciences or humanities, commercial production, style changes, routine data collection, and petroleum or natural gas exploration or drilling.
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