Research and Development — Attractive Tax Incentives for the Mining Industry

CIM Bulletin, Vol. 71, No. 797, 1978

R. D. Brown, F.C.A., Senior Tax Partner, Price Waterhouse & Co., Toronto, Ontario

An adequate level of R & D is crucial to achieve gains in productivity and to strengthen Canada's position in an increasingly competitive world.So stated Finance Minister Jean Chretien in his April 10, 1978 budget speech, on announcing a new measure designed to increase the productivity of Canadian industry and to assist in the creation of new technology. The effect of the new measure, which permits an income tax deduction of 150% of certain research and development (R & D) expenditures, can reduce the after-tax cost of a marginal dollar's worth of such expenditures to as little as 20 cents.This article discusses the income tax treatment of R & D expenditures in general, and describes in particular the income tax incentives which relate to R & D.