Research and Development

Maintaining a business environment that encourages more world-class research and development to be done and to be put to use in Canada is essential to our future prosperity.

• The federal government has done a superb job in recent years of boosting support for research and development through Canada's universities and colleges. Enhancing the supply of highly trained researchers, and enabling them to carry out leading-edge research, provides an important foundation for Canadian competitiveness.
• The next step is to encourage more successful commercialization of university research. Canadian universities spin off twice as many start-up companies per dollar of research as their American counterparts, but receive only half as much in licencing revenues. Canada appears to be good at starting businesses based on research. Now it must improve its record at growing these businesses.
• Canada's tax incentives for industrial research are among the most generous in the world, but two issues need to be addressed. First, the tax credits are of limited use to small start-up companies that have yet to become profitable. Second, while the R&D tax credits encourage companies to conduct research in Canada, other aspects of tax policy appear to discourage companies from exploiting the results of such research from a Canadian base.