Page 92

86 /

Notes

(1) Eligible expenditures in British Columbia are those that qualify for federal investment tax

credit (ITC) purposes. Canadian-controlled private corporations (CCPCs) are eligible for the

refundable credit on expenditures up to their expenditure limit (as it is defined for federal

purposes). The credit is not refundable for other corporations or for a CCPC’s expenditures

in excess of the expenditure limit. The credit, which was set to expire in 2009, has been

extended to September 1, 2014. Corporations that are active members of a partnership

that incurs qualifying expenditures are also entitled to claim this credit.

The credit is considered to be government assistance and reduces federal expenditures for

both the research and development (R&D) deduction and ITCs. The credit can be claimed

only once all other tax credits have been claimed. Unused non-refundable credits may be

carried forward 10 years and carried back three years. All or part of the non-refundable

credit can be renounced each year.

(2) Eligible expenditures in Alberta are those that qualify for federal ITC purposes. The

qualifying expenditures must be incurred after December 31, 2008 and cannot exceed $4

million per annum. The expenditure limit must be shared and allocated among associated

corporations. For taxation years ending after March 31, 2012, taxpayers are no longer

required to reduce Alberta’s expenditure base by federal ITCs related to the portion of

federal eligible expenditures that generated Alberta ITCs in that year (the Grind).

To avoid any tax planning that would defer the effect of the Grind until after the date when

it is repealed, Alberta enacted anti-avoidance rules to deem a corporation to have claimed

the maximum available federal ITCs where:

• The corporation had federal taxes payable or had paid federal taxes for the year or for

any of the three prior taxation years and federal ITCs are available to apply against

those taxes, or

• In the opinion of the Alberta tax authority, the corporation deducted elective amounts

to reduce its taxable income and federal income tax in lieu of claiming its available

federal SR&ED ITCs.

Alberta has also remedied technical problems with the computation of the Grind

retroactive to the inception of its SR&ED program in 2009, with the result that claimants

may wish to re-submit Alberta SR&ED claims filed for earlier years in order to apply a

reduced Grind against their Alberta SR&ED eligible expenditures.

Alberta also retroactively extended the filing deadline to 21 months (from 18 months) after

the corporation’s taxation year end, effective for taxation years ending after December 31,

2008.

(3) Eligible expenditures in Saskatchewan are determined by reference to the definition

of “qualified expenditures” for federal ITC purposes. For all qualifying expenditures

made between March 19, 2009 and March 31, 2012, the Saskatchewan ITC was fully

refundable for all corporations. For eligible expenditures made after March 31, 2012, the

Saskatchewan ITC is fully refundable for CCPCs up to their expenditure limit and non-

refundable for all other eligible expenditures. The credit is considered to be government

assistance and reduces federal expenditures for both the R&D deduction and ITCs.

Unclaimed non-refundable tax credits will remain available and can be carried back three

taxation years to be claimed against Saskatchewan income taxes payable or carried

forward for the subsequent 10 taxation years.

Provincial Research and Development Tax Incentives

Current as of May 3, 2013