A major Canadian tech industry group is urging the federal government to free up billions of dollars in fast-tracked funding to help sustain companies that are struggling to survive as the COVID-19 crisis wreaks havoc with the economy.
In an open letter to Prime Minister Justin Trudeau, the Ottawa-based Canadian Advanced Technology Alliance is calling on the feds to immediately release a $200-million backlog of Scientific Research and Experimental Development claims. The SR&ED program provides tax credits or refunds to companies that conduct scientific research or development in Canada.
The group also wants the government to create a $3.6-billion emergency fund that would provide zero-interest loans to “innovative companies” that are already pre-qualified to receive tax credits such as SR&ED.
In the letter, CATA chief executive Suzanne Grant says the proposals are aimed at assisting 12,000 Canadian-owned tech firms that collectively employ more than 85,000 people.
“We want to ensure we don’t lose hundreds of billions in past investments for research that developed intellectual property,” Grant said in a statement. “We need our most innovative tech companies to lead a rebound when we emerge from this COVID-19 emergency.”
In the letter, Grant calls the Canadian tech industry a “highly innovative sector that delivers vital services to Canada’s supply chain (and) overall economy,” adding, “We fear many vital parts of the sector and supply chains may collapse and never recover.”
Grant suggests the money could be disbursed through Innovation, Science and Economic Development Canada, adding she believes the fund could pay back all the disbursements within two-and-a-half years.
“Most importantly, the economic dividends would start immediately with continued employment,” Grant added.
CATA drafted the letter after consulting with organizations such as the Canadian Chamber of Commerce, the Canadian Venture Capital and Private Equity Association and Engineers Canada.