December 14th, 2015

More so than at almost any other point in recent history, technological innovation is a factor that can make or break an enterprise. The role of high technology in business is constantly evolving and creating new ways for companies to perform their functions more efficiently and economically. The downside to this is that these organizations must always strive to stay ahead of the technological curve and that means spending money on research and development. The Ontario Business Research Institute Tax Credit is an important example of government funding for business that makes this possible for organizations both large and small.

Businesses and Research Institutions Joining Forces

In addition to its financial incentives for eligible participants, the Ontario Business Research Institute Tax Credit is especially ingenious in that it combines the best of both worlds. Business leaders know the markets they participate in and the costs involved in making such an operation profitable. Educational institutions have the research and experimental know-how to create new technology and methodology or make appropriate modifications to them. Working together, these forces are able to generate and apply innovative solutions in a manner that satisfies the objective while also adhering to cost and overhead restrictions.

Financial Advantages

Organizations can claim a 20% refundable tax credit on qualified yearly expenditures to a maximum of $20 million annually. That can result in an annual tax rebate of up to $4 million for the money spent on their scientific research and experimental development.

While this tax credit is of great interest to corporations, they are not the only type of business that benefits. Some of the province’s smaller companies already make use of the Ontario Innovation Tax Credit to fund their research and experimental development needs. These same companies can simultaneously also employ the Ontario Business Research Institute Tax Credit, further cushioning the financial expenditures involved in staying current.

Qualifications for the Program

In order for organizations to qualify for this provincial tax credit, they must adhere to the following basic rules:

• Companies must carry on business in the tax year through a permanent establishment in Ontario
• Companies may not be exempt from corporate income tax
• Companies must have entered into an eligible contract with an eligible research institute
• Companies cannot already be connected to the eligible research institute

The eligible institutions in question ran the gamut from Ontario universities and community colleges to hospital research institutions to Ontario or Federal Centres of Excellence to nonprofit organizations deemed eligible for participation by the Ontario Minister of Finance.

Every province hopes to be at the forefront of technological innovation as it is such a key aspect of ensuring that businesses both survive and thrive in the modern world. The Ontario Business Research Institute Tax Credit allows large and small organizations in the province to perform this function in alliance with the provincial educational institutions specializing in that field. It is an example of government funding for business, which makes excellent use of the province’s business and educational capacities and provides the monetary assistance that makes such partnerships viable.