Small- and mid-sized Canadian-controlled private corporations can claim 42.6 per cent of their R&D costs via federal and provincial incentives, compared to just 20.2 per cent for large firms, according to a new study from the Toronto-based C.D. Howe Institute. (The Logic)

Talking point: Author John Lester, an executive fellow at the University of Calgary’s School of Public Policy called for Ottawa to rebalance its scientific research and experimental development (SR&ED) program by cutting the payout for small firms and raising it for large ones, which he says generate more benefits from their tinkering. While big businesses get reimbursed for a lower share of their expenses, the cheques they receive are typically significantly larger than those to startups because they spend more on R&D. The Council of Canadian Innovators (CCI), a scale-up lobby group, has called for Ottawa to limit foreign firms’ access to SR&ED unless they keep any resulting IP in Canada, and to introduce a lower tax rate for profits from domestically held patents. The Liberal government promised in the April budget a review of the program. While Lester also backed the patent-linked tax-cut concept, he claimed CCI’s proposed rule requiring that IP subsidized by SR&ED stay in-country may not be practical or economically beneficial.