research and experimental development (SR&ED) tax credit, a program that allows firms to claim a credit against R&D and other development expenses. Gryc says SR&ED is crucial for his firm. The company sells its services to e-retailers and sports clubs. As its customers have increased, Canopy has had to scale up its software, a process that, Gryc says, has required a fair amount of trial and error. “If it weren’t for SR&ED, our company would be much smaller and more risk averse,” he says. In 2012, Canopy raised $2 million from angel investors, but SR&ED has allowed the 12-employee firm to maintain a contingent of 10 data scientists and software engineers who spend their time refining the product and researching new approaches. SR&ED is the largest federal innovation program. In 2014, the program’s estimated cost to the federal government in forgone revenue was just under $2 billion. “That’s massive public support,” says Finn Poschmann, vice-president of policy analy- sis for the C.D. Howe Institute. “What there’s no evidence of is growing business expenditure on R&D.” In recent years, the federal government has begun to limit the


credit given to large and multinational firms while the level of funding for smaller companies has remained steady. Today,


says John Lester, an executive fellow at the University of Calgary’s School of Public Policy and a former Department of Finance economist, smaller firms earn credits that are 20% higher than those earned by larger firms. Lester is not con- vinced the new policy makes much sense. He worries about the practice of giving higher credits to small firms when there is no evidence their R&D provides any extra benefit for society (new discoveries, for example). Yet Gryc says early-stage firms such as Canopy depend on


SR&ED, provincial credits and angel financing. With more tech startups looking for cash, VCs can now be quite choosy. “For companies like ours, [VC] is a crowded space.” Still, Gryc and other upstarts have been able to tap into a new generation of angel investors. Many are entrepreneurs who have made small fortunes after building and exiting and have become talent spotters, mentors and investors at an age when their predecessors were still building companies. Michael Litt, who in 2011 founded Vidyard, a Waterloo tech firm that raised a US$18-million round in December 2014, recently launched his own angel-investing fund, Garage Capital, which places $25,000 to $150,000 in convertible debt in budding companies. He’s


190 Reasons


Membership with the Canadian Payroll Association is essential. Canada’s 1.5 million employers count on payroll professionals to annually pay $865 billion in wages and taxable benefits, $290 billion in statutory remittances, and $163 billion in benefits - all while complying with 190 regulatory requirements.


90 of Canada’s top 100 companies count on the Canadian Payroll Association membership for their payroll compliance knowledge


Member Benefits Include:


✔ Unlimited access to the Association’s #1 service, Payroll InfoLine This member service answers over 38,000 inquiries per year.


✔ Member pricing for Professional Development Seminars and Webinars Over 20 topics covered in seminars across Canada.


✔ Payroll Resources at payroll.ca and printed publications l


Legislative Compliance Rates Sheet


l Payroll Best Practice Guidelines & Checklists l Timely legislative updates via electronic e-SourceTM


Start enjoying your membership today at payroll.ca


54 | CPA MAGAZINE | JUNE/JULY 2015


Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10  |  Page 11  |  Page 12  |  Page 13  |  Page 14  |  Page 15  |  Page 16  |  Page 17  |  Page 18  |  Page 19  |  Page 20  |  Page 21  |  Page 22  |  Page 23  |  Page 24  |  Page 25  |  Page 26  |  Page 27  |  Page 28  |  Page 29  |  Page 30  |  Page 31  |  Page 32  |  Page 33  |  Page 34  |  Page 35  |  Page 36  |  Page 37  |  Page 38  |  Page 39  |  Page 40  |  Page 41  |  Page 42  |  Page 43  |  Page 44  |  Page 45  |  Page 46  |  Page 47  |  Page 48  |  Page 49  |  Page 50  |  Page 51  |  Page 52  |  Page 53  |  Page 54  |  Page 55  |  Page 56  |  Page 57  |  Page 58  |  Page 59  |  Page 60  |  Page 61  |  Page 62  |  Page 63  |  Page 64  |  Page 65  |  Page 66  |  Page 67  |  Page 68  |  Page 69  |  Page 70  |  Page 71  |  Page 72  |  Page 73  |  Page 74  |  Page 75  |  Page 76  |  Page 77  |  Page 78