With only two months left in 2024, companies should be strategizing to align their 2025 projects with various government incentives.
As we get deeper into the government’s fiscal year the amount of funding diminishes, and grant programs begin to close down. Grant programs like IRAP become more challenging to obtain at this time of the year.
The landscape:
Many companies that undertake work aligning with the SR&ED program are often good candidates for alternative sources of grant funding or no interest loans. Certain priority areas of funding can assist companies who engage in projects relating to:
- Research and Development
- Hiring in the STEM fields
- Expanding to international markets or domestically, if a food processor
- Cleantech innovations
- Agri-tech innovations
- Company growth and expansion
Our advice for companies engaging in R&D projects, hiring technical staff, expanding to international markets or undertaking high growth projects that align with programs like FedDev or other regional development agencies is to plan your project, budgets and timelines now. This allows companies to identify which projects can align with government incentives when they re-open or receive their new budget on April 1st, 2025. Being well prepared to apply for these programs is critical. Most have a hard deadline or are on a first come first serve basis. A great example of this is CanExport. As of the date of this post, CanExport is reviewing applications that were submitted May 3rd – May 9th of 2024. Our clients that have been approved, submitted applications early and have already proceeded to obtain funding through this program.
As for SR&ED, you carry out your work and retroactively receive a tax credit for eligible work and expenditures, meaning this is a retroactive program. However, far too often the claim process is being done retroactively too. Companies often wait until their fiscal year end to gather documentation, technical details and financial information, going back one or two years in some cases. This results in a rush to complete and submit the claim with their T2’s. Many companies extend past the six-month T2 filing deadline and will submit SR&ED as an amendment, delaying their SR&ED return.
Our solution is simple. We work proactively rather than retroactively with our clients by integrating with their tracking systems, provide best practices for documentation, and have short check-ins throughout the year to gathering critical information. The result of this is at a claimants fiscal year end we have everything we need to create a highly dependable claim with very little of the claimant’s time. This also aligns well with our grant process, ensuring companies are maximizing all government funding, not just SR&ED.
To recap, companies should have a planning session if they are undertaking various projects that align with those noted above. The programs that will be most complex or competitive will likely be SR&ED tax credit claims, FedDev and FedDev equivalents, IRAP and CanExport. However, there will certainly be more programs that require diligent planning and execution of applications.
We encourage companies in hi-tech sectors to reach out to us for planning sessions, whereby we can elaborate on our unique SR&ED process and how the exploration of government grants now, can result in maximized funding through the years to come.
If you have any questions, please contact us here.