Tax Incentives, Government Grants and Funding

KPMG’s Tax Incentives Practice has assisted thousands of organizations of all types and sizes, ranging from start-up businesses to multinational enterprises. Our multi-disciplinary team of professionals works with clients that are seeking to obtain Federal and Provincial Government funding for their research and development, innovation, capital growth, workforce advancement, market expansion and environmental sustainability projects. We can help explore your company’s eligibility to secure different forms of government funding, grants, incentives, investment tax credits (ITC), and cash refunds for your projects. In Canada, there are two main forms of government funding: indirect and direct funding.

Canada’s Scientific Research and Experimental Development (SR&ED) program is the country’s largest tax incentives program for research and innovation development. The intent is to foster technological innovation by creating a supportive environment for Canadian businesses and organizations. The support to conduct research and development (R&D) comes through the provision of both provincial and federal investment tax credits. Depending on the company size and incorporation status, these take the form of either cash refunds or reductions in taxes payable.

A discussion with KPMG’s experienced R&D tax incentive consultants on SR&ED eligibility is the key to unlocking substantial savings in the form of investment tax credits and corporate tax refunds.

For over 25 years, KPMG’s Tax Incentives Practice has helped businesses successfully navigate the SR&ED tax incentive program. Our professionals work together with your organization in preparing strong SR&ED claims that unlock the full potential of this corporate tax incentives program. Below are some of the services our team provides:

Claim preparation

A solid, defensible SR&ED claim can be time-consuming, taking critical resources away from your company’s daily activities. KPMG tax professionals will take on the tax preparation services to help minimize the time your team spends on R&D compliance. Our proprietary turnkey claim preparation process allows us to compile your technical descriptions, calculate eligible expenditures, prepare the required tax forms, collect required documentation, as well as respond to the Canada Revenue Agency SR&ED audit/review requests while having focused and impactful interactions with your team that minimize their time.

Participation in Canada Revenue Agency SR&ED reviews and services

Defending your SR&ED claims under CRA services or reviews/audits can be very stressful. KPMG’s experienced Tax Incentives Practice team is well versed in preparing for these interactions and providing direct support. Our assistance can take the form of preparing your staff in advance of a review, physical attendance at meetings, or assistance in responding to information requests. Regardless of whether it is a partial or full CRA review/audit, KPMG can help you demonstrate the scientific eligibility and justify the financial extent of your SR&ED claim.

Claim disputes/objections

KPMG tax professionals can assist your company with administrative second reviews, notice of objections to legal proceedings to tax court, or developing a response to an unfavourable CRA findings report. Our team intimately understands the income tax act and related CRA policies; after all, SR&ED is a tax credit program. We will help you respond to the CRA in a manner that is supported by policy, legislation, and jurisprudence.

Development of an R&D tracking system

Using corporate data, KPMG tax professionals [GA1] develop a deep understanding of an organization, their cost tracking systems, and their technical documentation retention practices. Our professionals can assist companies in building best practices through methods such as the development of R&D tracking systems, documentation retention processes and ERP extractions to aid in the SR&ED claim process. This can help to ensure projects and expenditures are not missed and that proper documentation exists to defend your SR&ED claims under CRA review.

Many provinces have significant tax credits for the production and marketing of interactive digital media products such as video games, digital educational products, e-business activities, as well as other gaming, digital arts and media products. These credits can work in conjunction with other creative industry funding and incentives to cover a large part of digital development efforts. KPMG’s experienced team will work with you to identify eligible productions and help you to prepare, optimize, and review your applications for digital production tax credits.

Direct funding – grants and loans

While the SR&ED program is by far the largest and most complex of the government's R&D support programs, both the federal and provincial governments also provide a wide variety of direct incentives in the form of grants, contributions, and loans. These government incentives target the areas of capital growth, workforce advancement, market expansion, environmental sustainability, and innovation development (alongside SR&ED), to cite a few.

There are thousands of government innovation funding programs available with varying funding eligibility criteria and intake periods. KPMG tax professionals can help you determine your eligibility for these programs, depending on when you plan to incur costs. Our team is also able to assist in the application development process to ensure it demonstrates key government program metrics versus business metrics.

KPMG’s experienced team of incentive consultants will work with you to analyze the research and development funding landscape and match your projects to programs that will maximize your funding requests. Our team will not only analyze expenditures in the current year, but we will investigate your long-term plans to ensure all eligible costs are captured for funding now and in the future.