Editorial - 17-19

Dr John McDougall is making it easy for incoming prime minister Paul Martin. He and his associates have come up with a superior commercialization model that could — if properly funded and implemented — help Canada make significant strides in bridging the gaps that lie between excellent ideas and their exploitation in the marketplace.

A cursory reading of Martin’s recent speeches indicate that his thinking in the area of innovation and company formation is both sympathetic but complementary. At least two of the models considered by McDougall when formulating his multi-billion dollar proposal were mentioned in Martin’s September 18th speech to the Montreal Board of Trade.

Martin is generally recognized as the architect of Canada’s current innovation strategy. It’s hoped that his return will revive a process that’s clearly languished over the past year. But as the McDougall proposal makes very clear, any major boost to downstream innovation will take a lot of money and political courage to make it a reality.

Industry is also looking for changes to the tax credit system for R&D. As the article on page 4 illustrates, Canada’s dominant position is being eroded and a fresh perspective and policy changes are far overdue.

Making the SR&ED tax credit accessible to firms regardless of size or profitability is a key plank going forward. With the dramatic improvements made to the general tax environment, it’s time to seriously explore how niche programs like SR&ED can be strengthened. The benefits will far exceed the out-of-pocket costs.