Dear Member of Parliament

RE: Canada’s Innovation Strategy and the Future of the SR&ED Program

I am writing to express my concern about the current debate regarding the SR&ED tax credit program and its effectiveness. I am seeking your support in protecting this important program. Vocal groups appear to be influencing the Federal Government to re-direct funding from the SR&ED program, an ‘indirect’ investment program accessible by companies based on objective criteria, to a highly selective private venture capital program (eg direct investment). However, private SMBs, the very companies these programs are designed to support and which will be among the most impacted by this change, have so far been underrepresented in the Government’s consultations and their important perspective not heard.

Critics are pointing to global R&D rankings in which Canada lags its peers and making generalizations that these rankings are evidence that the SR&ED program as a whole is ineffective. However, with respect to private SMBs the opposite if true. One measure of successful R&D commercialization is exit activity (eg IPOs and M&A). CB Insights recently reported that Canada ranks fourth globally in terms of number of exits - strong evidence of the success of Canadian private small businesses in commercializing R&D. Moreover, CB Insights reports that over two-thirds of global exits have no institutional backing (ie, venture capital). Venture capital plays an important role but is clearly not the sole driver of success.

[Please describe your own success in undertaking R&D supported by the SR&ED program and commercializing the resulting technologies, and the jobs it has created].

Reducing SR&ED funding to the broad base of Canadian SMBs that represent the foundation of our ecosystem is the wrong policy choice. Instead of a debate centered on direct vs. indirect investment models, the more meaningful debate is whether public and larger private companies that receive the biggest portion of the total SR&ED expenditures should continue to receive this subsidy when they, unlike small business, have access to alternative R&D funding sources.

I urge you to listen to the voice of Canadian private SMBs who are best positioned to provide firsthand evidence of the effectiveness of the SR&ED program in fostering innovation, creating jobs and making this segment of the Canadian economy world class.

Sincerely,

______

Name: