2010-Q3

Welcome to TSI's Q3 2010 newsletter, a quarterly publication distributed to our valued clients, strategic partners, and colleagues. Highlights of this issue include:

Company News:

• TSI launches a new online SR&ED software time-tracking for clients to help bullet-proof audits.
• TSI introduces an exciting new service offering to help clients recoup money overspent on commodity taxes.

 Funding Program Profile: We present a profile of the Export Market Access (EMA) funding program designed to co-fund business expansion into foreign markets.

Industry News:

• CATA announces impact of new CRA SR&ED claim review procedures
• NRC supporting free industry benchmarking studies

Best regards,
Jason Schwandt, Vice President, Business Development

COMPANY NEWS

NEW COMMODITY TAXES RECOVERY SERVICE
TSI is pleased to announce the launch of a new service offering designed to bring even greater value to our clients. With few goods and services escaping taxation and with continual changes to legislation, the complexity of commodity taxes like PST, GST, HST, and EHT can often lead to overpayments. In fact, many companies and organizations operating in Canada overpay millions of dollars in commodity taxes annually. For companies like manufacturers with substantial spending on materials, equipment, and advertising, there are often significant opportunities for recovery. Our risk-free, contingency-based approach is executed by accountants with over 20 years experience in commodity taxes recovery and over 2,400 successful recoveries. If no opportunities are found, there is no cost whatsoever. The process requires almost no overhead or supervision from clients, and with the ability to go back to payments over 4 years old, can result in substantial returns. Contact TSI to learn more about how we can assist you recoup these funds.

SR&ED SOFTWARE:TIME AND DOCUMENTATION TRACKING SYSTEM
With the Canada Revenue Agency becoming much stricter on the requirements for contemporaneous time and document tracking for SR&ED submissions, TSI has announced the launch of a new online SR&ED software documentation system to assist our clients document their SR&ED claims and track their time. The system is fully internet-based, and offers a secure, easy-to-use, and reliable method to track project time, milestones, and experiments. The system enables staff to capture time by person, by project, and by eligible SR&ED activity, and supports date-stamping for CRA audit corroboration. The system also supports up to 5GB of document storage that can be easily sorted and retrieved. Contact us for more information about successfully managing your company's documentation system, and putting you on a path to bullet-proof CRA audit support.

FUNDING PROGRAM PROFILE: EXPORT MARKET ACCESS

Each quarter we profile a new funding program. This quarter, we present a summarized profile of the Export Market Access (EMA) program.

Program name: Export Market Access

Description:
• The Export Market Access program assists small and mid-sized businesses to access and expand growth in new international markets outside of Canada. This is done by sharing the cost of initiatives that companies normally may not undertake alone and thereby reduce the risk of entering those markets.

Eligibility Requirements:
• Companies with goods and services currently produced in Ontario, with between 5 to 500 employees
• Companies with a minimum of $500K in annual sales, and that have been registered for more than 2 years

Valuation:
• 50/50 cost sharing, with contributions ranging between $2K and $30K
• 50% of the approved amount is paid up-front, with the remainder upon project completion
• Major categories of costs covered include the following: 1) Direct contacts (eg: trade show booth rentals, airfare for incoming/outgoing missions, etc), 2) Marketing tools (eg: development of promotional materials (excluding product documentation), development of generic branding material such as display panels or information booths), 3) Market research (eg: consulting fees for market intelligence or development of an international marketing plan), 4) Foreign bidding projects (eg: pre-feasibility studies, proposal preparation, product testing for foreign standards/certification)

Submission requirements:
• Online application to include details such as export targets, proposed expenditures, financing sources, and performance measurements.

Application Acceptance Criteria:
• Completeness of the application, and an assessment of the financial and management capability of the applicant to complete the proposed activities in a timely basis.

Please contact TSI for more information about this or other funding programs of interest.

INDUSTRY NEWS

NEW SR&ED CLAIM REVIEW PROCEDURES
In June of 2010, the Canada Revenue Agency (CRA) released a new internal procedural manual for its Research & Technology advisors, along with a new guide to the claim review process for claimants.
In polling businesses and SR&ED practitioners, the Canadian Advanced Technology Alliance (CATA) found that organizations experiencing reviews under this new regime were "finding the reviews much more rigid, and that that the positions being taken and the information requirements more oriented to dedicated research projects as opposed to projects where the R&D is highly integrated within the context of the need to develop advanced technologies required for improved commercial products, processes, and services."
"We are hearing of companies that thought they knew what was expected and that had good claiming experiences now not being able to support their current claims to the satisfaction of reviewers when their claims are reviewed under these new protocols" announced CATA.
"There is a much greater emphasis on claimants providing documented, contemporaneous evidence. Now, support for a claim depends much less on the ability of a company’s personnel to provide oral evidence of what happened and why. Rather, companies are now expected to have retained project specific, contemporaneously produced and dated documents that provide this information."
The consensus was that CRA reviewers seem to be looking closely for hard, detailed support in the form of planning documents for the sequence of experiments and analytical work, and how the results contributed to the resolution of the technological uncertainties.
If you have SR&ED claim currently under review or coming up for review, or if you are filing new claims, it is important that you understand the implications of these changes. CATA suggests that "you cannot assume that you can rely on past experience as a predictor of the outcome of your SR&ED claims going forward".
For details of the report, link to http://cata.ca/Advocacy/SRED/updates/sred_update_July10.html , or contact your TSI representative for more information on how to better equip your organization to collect and organize documentation in order to improve your success during reviews.

NRC SUPPORTING FREE INDUSTRY PERFORMANCE BENCHMARKING STUDIES
Through its network of Industrial Technology Advisors, the National Research Council's IRAP (Industrial Research Assistance Program) program is promoting a performance benchmarking study through the Michigan Manufacturing Technology Center (MMTC) for Canadian manufacturers to compare themselves against others in their industry. The MMTC is considered a leader in collecting data for benchmarking of manufacturing companies, and has collected data on over 10,000 companies across North America since 1992. The service is being offered free of charge to Canadian companies with under 500 employees (normally a $595 charge) until early 2011. Companies spend approximately 3 hours entering performance and financial data into a 4-6 page questionnaire (all information is kept strictly confidential). Generally within 2-3 weeks, applicants are issued a customized performance snapshot which compares the company's performance to that of similar companies in the same vertical market on a variety of metrics including sales growth, productivity, schedule integrity, delivery, scrap and rejects, computer use, and more than 50 other measures. The applicant obtains a listing and discussion of strengths and weaknesses vis-a-vis the comparison group, a detailed graphical display of the applicant's performance compared to the rest of the group, a profile of the comparison group, and appendices that summarize all measures data and show the applicant which questions go into calculating each measure. It gives companies insight into how they stack up, and where improvements could be identified.
Contact TSI for more information about the program and how to register for your free benchmarking study.
CONTACT US

For more information about any of the content in this newsletter, or to arrange a complimentary consultation, please contact Jason Schwandt at 905-738-6770 x2010 or via [email protected].