Liberal leader Stephane Dion has announced a $1-billion Advanced Manufacturing Prosperity (AMP) Fund that includes a provision to make the scientific research and experimental development (SR&ED) tax credit program partially refundable. The Fund was announced January 18th to counter the Conservative government's $1-billion retraining and relocation program, which Dion dismissed as a program that will only help workers that have already lost their jobs.
In a speech to the Hamilton Chamber of Commerce, Dion outlined the main thrusts of the AMP Fund which is designed to offset the loss of Canada's lower currency advantage and the efforts of competing nations to take advantage of the boom in clean and green technology development.
To receive AMP funding, manufacturing and R&D facilities must leverage significant private sector investment and create jobs, they must be anchor facilities that attract secondary industries such as suppliers and services, and help position Canada as a leader in the manufacture of green technologies and products.
The Liberal plan includes further cuts to corporate and personal income tax rates, incentives to attract core investment and increased support for R&D.
"We are falling behind the European Union and many American states that have realized this incredible investment opportunity (in green technologies)," said Dion. "The move towards an environmentally sustainable global economy is generating more than $100 billion in annual capital flows."
Dion's endorsement of the call to extend refundability of the SR&ED tax credit is in contrast to the Conservative government, which recently suggested that the upcoming Budget would not devote additional funds to expand the scope of the program. Refundability of the tax credit has been the number one priority of most of Canada's industry associations.
"Canada currently lags behind other countries in getting our designs to the market," he said. "Innovation is essential to the survival of our industries, but it can be an expensive undertaking. By offering incentives for companies to continue investing in R&D, the Liberal Party will encourage all companies to innovate, even if that innovation does not lead immediately to profitability. This change t the SR&ED Tax Credit is vital at a time when many companies are struggling to become or stay profitable."
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