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Alberta Shuts Down Its SRED Program
Alberta Shuts Down Its SRED Program for fiscal year ends after January 1, 2020.
Alberta cancels its Provincial SRED Program as of January 1 2020
A note here on timing. Because SRED is claimed in arrears, and because most corporations have a December 31st YE, many Albertans and Alberta firms will learn about the Alberta SR&ED program cancellation over the next 6 months as they prepare to file their FY20 T2 + SRED returns.
I can’t believe how little press this news item received. As of Jan 1, 2020, there are no more provincial SRED credits awarded for qualifying SRED expenditures carried out in Alberta. None.
For corporate year ends prior to 2020, Alberta had a generous SRED program. 10% refundable credits up to $400K in credits. That’s fairly equivalent to Ontario’s current 8% refundable OITC credits (OITC) + 3.5% non-refundable credits. Equivalent if you’re a CCPC that is. For large and foreign-owned corporations, Alberta’s 10% refundable credits trumped Ontario’s 3.5% non-refundable ORDTC credits handily.
Now in FY2020, Alberta CCPCs will see their SRED credits drop by 22% Large Alberta companies will see their SRED credits drop by 40%. This is all before CEWS claws back their SRED credits by 50% or more (everywhere in Canada). Is anybody paying attention? Is this not a big deal?!
I get it. Oil and gas companies aren’t picking up and moving to BC (10% refundable credits for CCPC’s, 10% non-refundable for large corporations) because of this SRED program cancellation. Likewise, Alberta manufacturers probably aren’t drawing up plans to move to Winnipeg and its 15% (half-refundable) SRED credits for all corporations, big or small.
But what about software shops? High tech firms? Start-ups? SRED funding is critical to these firms’ plans. These companies are typically mobile, not tied down by a lot of expensive infrastructure or a local customer base that must be served locally. Are these firms studying a move? I’m not aware of any.
SRED planning is critical to maximize the funding you receive. I’m not talking about “maximizing” your 2020 or 2021 credits. That sort of “planning” is for the ill-informed and for grifters. I’m talking about planning to maximize your SR&ED credits for the next ten years. That’s smart. Call G6, we’re here to help you. Remember. Nobody outworks G6 in service of its customers.