Is your business grappling with the complexities of SR&ED financing? Or perhaps considering a switch to a new SR&ED provider to enhance your claim benefits—and ultimately grow faster?
Collision 2024 in Toronto is your gateway to transforming these challenges into growth opportunities. As you prepare to scale and innovate, understanding the nuances of SR&ED tax incentives is crucial.
Join us at Boast’s Booth E261 in Hall B to unravel how strategic SR&ED financing can be a game-changer for your business.
Book a complimentary Tech Scoping Assessment for Collision 2024 now!
Keeping up with the CRA’s rigorous documentation requirements can be daunting. Meet our SR&ED experts at Collision 2024, who can guide you through meticulous record-keeping practices that withstand scrutiny and maximize your claim potential.
Cash flow is your startup’s lifeline. Don’t let delays in SR&ED refunds stifle your progress. Discover how SR&ED financing options can provide you with immediate working capital to keep your innovation on track without the wait.
We help you overcome the transition challenges. Switching SR&ED providers can seem daunting. Concerns about transition complexities and potential delays in benefits realization are common. At Collision 2024, our consultants are ready to outline a smooth transition strategy that aligns with your company’s needs, ensuring no disruption to your ongoing R&D activities.
Whether you’re from British Columbia’s Cleantech scene, Ontario’s Quantum Computing hubs or other innovative technology sectors across Canada, regional nuances in SR&ED claims matter. At Collision 2024, learn from Boast’s consultants about specific provincial incentives that can amplify your SR&ED claims, ensuring you leverage every possible advantage.
Are you maximizing your SR&ED claim or leaving money on the table? Let our experts analyze your R&D expenditures and tailor a strategy that increases your financial return, empowering you to reinvest in essential growth initiatives.
Don’t miss the chance to turn SR&ED into a strategic asset for your startup. Visit Boast’s Booth E261 in Hall B at Collision 2024 to secure a one-on-one session with our top SR&ED consultants.
Book your time and start your journey towards optimized R&D financing solutions that propel your business forward.
Q: What are the signs that our current SR&ED provider isn’t maximizing our potential benefits?
A: Common signs include consistently low SR&ED claims compared to R&D expenditures, lack of proactive communication, and feedback suggesting missed opportunities for optimization.
Q: How can a new SR&ED consultant ensure a smoother and more beneficial transition?
A: A qualified SR&ED consultant will conduct a thorough review of your past claims, establish clear communication channels, and implement a detailed transition plan that minimizes disruption to your operations.
Q: What specific advantages do other SR&ED consultants offer over our current one?
A: Look for consultants who offer more comprehensive services, such as detailed documentation support, strategic planning for maximizing claims, and deep expertise in your specific industry sector.
Q: Can a new SR&ED provider offer better integration with our existing financial systems?
A: Yes, many SR&ED consultants prioritize technological compatibility to streamline data sharing, improve accuracy in claim preparation, and enhance overall process efficiency.
Q: How long does it typically take to see improved results after switching SR&ED consultants? [TBD]
A: While immediate improvements may be noticeable, it typically takes one fiscal year cycle to realize the benefits of enhanced strategic planning and execution fully.
A new Artificial Intelligence (AI) framework has been pitched in the US Senate that proposes a $32 billion government investment into non-defense AI research, offering an “all-hands-on-deck” approach to funding AI innovation that has support from both Democrats and Republicans.
But despite the high price tag to drive more homegrown AI research and development, The Driving US Innovation in Artificial Intelligence proposal lacks urgent or explicit guidelines on federal AI regulation.
To that end, the pitch actually refers to using “existing laws for AI” as being the most immediate form of protection against nascent machine learning principles.
This is noteworthy given there is no current federal data privacy framework in place within the United States, which has been a thorn in the side of policy pundits for more than two decades.
Instead, as Senate majority leader Chuck Schumer (D-NY) explained in an official statement following the pitch, this new proposal calls on yet more proposals to firm up the specifics of legislation—without delaying the $32 billion in R&D funding, which could land as soon as 2026:
“Our working group was able to identify key areas of policy that have bipartisan consensus […] Now, the work continues with our Committees, Chairmen, and Ranking Members to develop and advance legislation.”
The TL;DR? Funding AI innovation (and maintaining the country’s competitiveness in the field) is the top priority for the US officials who authored the new framework.
As for the long-awaited data privacy regulations? Those measures will simply need to catch up.
“In the midst of rapid AI advancements, the Senate can lead or be led. We plan to lead, to deliver for the American people, helping ensure that AI comes as a benefit to society, not a threat,” said Senator Martin Heinrich (D-NM), co-founder and co-chair of the Senate AI Caucus. “This roadmap positions us to unlock AI innovation that will deliver major scientific and medical advancements and help maintain our global leadership.”
Fight for the Future director Evan Greer was one of the loudest voices in opposition of the new proposal, and he was quick to flag that there was “no serious discussion” of open source AI products, nor details on long-awaited privacy protections.
“The framework eagerly suggests pouring Americans’ tax dollars into AI research and development,” Greer’s statement in response to the Senators’ pitch reads. “Meanwhile, there’s almost nothing meaningful around some of the most important and urgent AI policy issues like the technology’s impact on policing, immigration, and worker’s rights.”
Despite criticism, the framework does lay out an actionable path to leveraging existing pools of funding and government measures to quickly distribute the $32 billion in R&D funding across government and private sector stakeholders. This includes prioritizing facets of the landmark CHIPS and Science Act that haven’t been fully allocated, as well as addressing backlogged NIST initiatives related to AI development.
While critics may rightly be concerned that AI innovation is outpacing necessary consumer protections, it’s worth noting that AI adoption has gone from “experimental to operational” for businesses across sectors.
Aside from a rise in the number of companies that are directly involved in developing new AI solutions, businesses are relying on AI to fill in operation gaps and drive efficiency in the face of myriad economic challenges.
According to the latest research from Ramp, for instance, the average business spent $1,500 on AI tools in Q1 2024, marking a 138 percent year-over-year jump. Zooming out across the entire year, AI spending grew 293 percent among Ramp customers—and shows no signs of slowing.
To that end, mid-market companies are leading the AI adoption charge, with average company spend jumping from just over $1,000 in Q1 2023 to more than $2,500 today.
While the concerns around the rapid adoption of AI are valid, investments—from both the government and the private sector—into advancing AI are a worthwhile endeavor that’s proving to pay off.
Not only are businesses within and outside of tech benefiting from new AI solutions to achieve more cost-effective operational functions, innovative companies that are driving new AI solutions will have the opportunity to leverage government support to help fund their R&D.
The US’s R&D Tax Credit, for instance, can be used to offset income taxes or employer payroll taxes for businesses that are engaged in truly innovative research and development. This can help them offset their tax liability, maintain more liquidity, and potentially even maintain equity in their business as they work to create new solutions that help advance the field.
Beyond federal incentives, their are R&D tax credits at the state level across the US that teams can tap into to fuel more R&D and create homegrown AI solutions that the government may want to help fund.
At Boast, we’ve worked with thousands of startups across North America to capture non-dilutive funding to help fuel their product roadmap and enhance their R&D.
Along with insights into available tax credits, our platform combines key financial and project tracking systems into a single source of intelligence, giving you the insight you need to optimize strategies and capitalize on the innovation your team is driving.
Talk to one of our R&D tax credit experts today to understand how you can tap into government funding to capture innovation capital that can extend your runway.
The process of developing and funding new solutions isn’t a journey that founders should navigate on their own. There are technological complexities that call for an “engineers mindset” as well as facets of running a business that require a very different kind of analytical thinking that need to work in tandem.
Partnerships with others in the tech ecosystem, therefore, is key to driving innovation in Canada or abroad. This is something that Deskree Founder and CEO Dmytro Grechko knows firsthand as both a founder in his own right and the creator of a solution that helps other teams build great products.
At Deskree, their mission is to make software development accessible to everyone by breaking down traditional barriers and empowering people to turn their ideas into reality.
This can be a gamechanger for any entrepreneurs who may have the vision to build an amazing product, but lack that backend expertise. Deskree’s proven 5-step process for building an effective and scalable cloud infrastructure offers visionaries a seamless route for bringing their ideas to life in minutes—not weeks, months or even years.
The TL;DR? Their solution enables founders to focus on creating amazing products, letting Deskree do the heavy lifting when it comes to technical nitty gritty. It’s an ethos that we mirror in our mission here at Boast as we strive to help founders drive innovation without burdening them or expanding their already heavy workload.
I’m thrilled to pick Dmytro’s brain on some of the exciting projects he’s executing at Deskree today, the unique R&D that goes into creating no-code solutions, and what’s in store as Deskree grows.
Deskree spends significant time helping customers out with their own R&D and he’s seen firsthand what a struggle the SR&ED claim process can be without the proper automation, process and people there to support.
At Boast, our AI helps streamline some of the arduous data collection to help our human tax and tech experts create stronger, larger, more comprehensive claims for customers.
As Dmytro explains, there’s a huge difference between a phone-it-in software or Big 4 solutions, or a true partner like Boast who saddles up with you to do the heavy lifting and maximize your SR&ED outcomes.
Boast is unlike any product Dmytro has encountered in this regard. Our team is there for him when questions arise, have answers ready when the CRA comes knocking, and knows his tech and how to communicate it in SR&ED terms.
Boast’s proven process for maximizing SR&ED goes beyond just tax credits. Our proven success year after year has helped our customers like Deskree rethink their R&D operations to be more organized, efficient and ultimately drive more innovation.
Helping teams maximize their access to innovation funding while helping them actually improve their R&D workflows and achieve greater success is what we’re all about here at Boast.
Watch the full interview with Dmytro where he unpacks his founder’s journey on Boast’s Youtube Channel here.
It’s been a contentious few weeks for members of the Canadian tech ecosystem, as leaders across the country continue to decry key facets of Budget 2024 that dropped back in April.
Specifically, the Council of Canadian Innovators (CCI) released their second open letter to Finance Minister Chrystia Freeland asking for a walk-back on plans to increase the capital gains inclusion rate from 50 percent to 66.7 percent.
With signatories including the Canadian Chamber of commerce, the Canadian Federation for Independent Business (CFIB), the Canadian Venture Capital and Private Equity Association (CVCA) and more, a critical mass of voices are coming out against tax changes that are deemed “shortsighted” by the group.
While the new capital gains inclusion rate—which is currently on track to start going into effect June 25—is estimated to raise $19.4 billion CAD in revenue over a five-year period, the adjusted rate “will limit opportunities for all generations and make Canada a less competitive, and less innovative nation,” the CCI’s statement reads.
Despite estimates that the rate changes will only immediately impact roughly 40,000 individuals should it launch on schedule next month, the downstream impact on job creation could be substantial. As the CCI response explains, this new tax system will flat-out make investing in new Canadian businesses less attractive, full-stop.
“With higher capital gains tax, VC funds are now looking at smaller returns after tax, which means less funding or smaller shares left over for founders,” Laurent Carbonneau, CCI Director of Policy and Research, explains in their latest statement.
These latest pleas build on an original open letter published back in April contesting the capital gains rate change in April, which to date has gained more than 2000 signatures.
While it remains to be seen whether the federal budget will be modified ahead of key deadlines in June, the Ontario Securities Commission (OSC) has introduced initiatives for the province’s TestLab with the aim of increasing access to capital for new startups.
Specifically, the OSC has outlined new Dealer exemptions that will allow businesses to fundraise leveraging tools like crowdfunding portals or angel investor groups without having to register as a Dealer with the Ontario government. This would enable qualified businesses to collect upwards of $3 million CAD in capital from designated not-for-profit sources to support their business with fewer hoops to jump through.
The temporary measures—which will be in effect until October 2025—target innovative, early-stage startups with fewer than 100 employees based within Ontario. The measures exclude businesses whose models are based on investments into real estate, mortgages or other business assets (ie. crypto).
The OSC simultaneously announced similar Dealer registration exemptions for angel groups, enabling them to trade securities in Ontario early-stage startups without needing to register as a dealer. There are unique qualifications for this amendment as well: Investor groups must operate as nonprofits, be based in Ontario, and must have all members be an accredited investor or eligible to be a self-certified investor.
The goal of these measures are to combat a continued lag in venture funding within the greater Toronto area as businesses across Canada—and the world—face a bevy of micro- and macro-economic factors that have made fundraising difficult.
While federal and provincial governments are doing all they can to balance their budgets in the face of continued economic upheaval, there are still ways for Canadian businesses of all sizes to capture growth in the current market.
Key to the measures from the OSC and elsewhere are prioritizing support for businesses that are driving true innovation, which is rooted in research and development (R&D).
Any businesses that are embarking on R&D initiatives that tackle Technological Uncertainty, follow a Systematic Investigation and embrace Technological Advancement could be able to recoup up to 64 percent of their key innovation investments through SR&ED.
And while established businesses may be well aware of this key source of funding, the fear of an audit—or even just the time that could go into dealing with the CRA—disincentivizes many eligible companies from even seeking this key source of capital that could make or break their growth trajectory.
With Boast, teams can rest assured that not only will the claims our in-house experts and AI platform compile leave-no-stone-unturned in identifying SR&ED opportunities, but the unmatched detail of our SR&ED reports is pivotal in defending our customer’s claims when audits inevitably happen.
And with government budgets tighter than ever, the CRA is arguably taking a closer look at every claim and auditing with greater veracity than ever before. Lucky for Boast customers, we take on the complete audit defense for you, with an industry-leading recovery rate of over 90 percent.
To learn more about how Boast can help you stretch your investments further and help you scale in the current market, talk to an expert today.
How can you navigate the startup journey and give your company its best shot at success?
We’ve teamed up with GetFresh Ventures to help Vancouver startups overcome their barriers to funding growth. In this live workshop, GetFresh’s founder and managing partner Diraj Goel will dive into various problems faced by local businesses, providing tailored advice to help your business scale.
May 30th at 4:30pm PT
777 Dunsmuir St #1250, Vancouver, BC V7Y 1G6
Diraj Goel is a distinguished figure in the tech industry, renowned for his strategic foresight and dedication to fostering innovation. As the Founder and Managing Partner of GetFresh Ventures, Diraj has played a pivotal role in launching over 200 startups onto paths of significant growth and profitability. His tenure at technology giants such as Hootsuite and Vision Critical has endowed him with invaluable insights into operational excellence and customer engagement strategies, making him a cornerstone in the realm of business growth acceleration.
Register for EventGetting into the startup game isn’t something you should pursue if you just want to have a founder title.
When you’re first getting your business off the ground, there are going to be significant struggles at the onset—including potentially having to juggle a day job or side gig while you chip away at building your dream.
But as Ilya Brotzky, CEO of VanHack, explains, there are plenty of excuses that founders can make for why their startup dreams might not pan out as planned. But if you stick to it and take advantage of the many resources available—from mentors to R&D tax credits—that can help fund your innovation without immediately handing over equity, your path to success will become a lot clearer.
At VanHack, Ilya and his team are on a mission to create a borderless world for tech talent by connecting the world’s top software engineering, design, and digital marketing talent with some of the leading innovating businesses in North America. With more than 450,000 members from over 100 countries, VanHack is the largest workforce that is ready to relocate in the world, truly walking the walk when it comes to “connecting cultures through code.”
Along with helping companies grow through on-demand staffing, Ilya is also a force in both the Vancouver, BC and broader Canadian innovation ecosystem. I know I caught up with Ilya at my first Collision Conference in Toronto last summer, but he’s been working with our team at Boast for years to help VanHack bring their game-changing solutions to reality.
He’s on an incredible mission, and has the network behind him to make it work. We pick his brains about his journey through the startup space, what it takes to succeed in today’s market, and tips for any founders launching tech in 2024.
As Ilya explains, getting into the startup game isn’t for those who “just want to be cool.” It may seem glamorous or exciting from the outside, but you really need to have passion—and be willing to keep a day job or side gig at the beginning—to see your new product or solution through to commercialization.
This includes not waiting around for investors to swoop in and fund your mission from the start. Founders really need to seek out non-dilutive avenues of funding at the early stage so that they can retain equity in the business.
The benefit here is twofold: On the one hand, founders are able to retain control of their business as the mission evolves. If they’re tapping into non-dilutive funding programs like SR&ED in Canada, they’re also demonstrating to future investors that they are savvy with seeking maximum return on investment. This will instill confidence that when it is time to seek equity investment, founders can be trusted to stretch each dollar further.
You’ll often hear that diving headlong into entrepreneurship calls for bravery. But as Amanda Horn shows, it’s really about having conviction, and believing strongly in both your own abilities as well as the outcomes your innovative ideas can help drive.
Amanda is the founder of Loless Blue Beauty, a sustainable shave and body care company that’s reimagining beauty products and personal care routines to use less water, less plastic and less waste, creating the next wave of eco-conscious consumers.
And while Amanda strives to protect both human and the planet’s water resources with Loless, she also plays a big role in the larger Blue Economy, which is booming in Eastern Canada.
She’s a Mentor focused on Ocean Science Communication & Brand Storytelling for the Sustainable Ocean Alliance, a Blue Standard Consultant for Oceanic Global, Advisory Board Member for The Canada Node for the UN Ocean Decade Global Early Career Ocean Professionals Programme, and a consultant for the Canadian Ocean Literacy Coalition.
And all of this in just the past couple of years!
Needless to say, Amanda knows the Blue Economy well, and I can’t wait to pick her brain on what it takes to build a business that supports and benefits from the Oceans in 2024.
As Amanda explains, to be a founder is to be human. Not every day is a great day on the startup journey, but it’s critical that you document your wins and recall them when times are tough.
It’s also critical that you seek out community partners who are going to be with you during those down times. Whether it’s mentors like Amanda, accelerators or incubators within the Blue Economy ecosystem, or R&D tax credit solutions like Boast: People, not products, make all the difference.
That’s key to our mission at Boast. While we leverage the latest technology to help streamline operations, it’s the incredible people on our team who bring years of tech know-how and fluency in navigating tax code that sets us apart from any other R&D tax credit solutions.
Republic First Bank of Philadelphia was seized by the Federal Deposit Insurance Corp (FDIC) last week, marking the United States’ first federally-managed bank closure of 2024—and giving many in the finance space a bout of deja vu.
That’s because it was just over a year ago that bank closures were trending, with the similarly-named First Republic Bank being among a trio of lending institutions whose closures rocked the tech and startup space.
But there are key differences between the situation folding out today compared to a year ago, when it seemed for many founders like the bedrock of the startup ecosystem was starting to erode.
While the silver linings of any bank closure may feel like a stretch, business leaders in the innovation space can largely rest assured that this latest closure won’t shock the system in the same way that last year’s closures left many CFOs and founders scrambling.
While many of the same economic conditions that arguably tipped off the domino effect of closures persist today—stubborn inflation, high interest rates—Republic First’s closure is on a different scale altogether.
What made last year’s closures such a shock to the tech and startup community was the sheer size and scope of the institutions affected. First Republic Bank, for instance, had $232.9 billion in assets (and $104.5 billion in deposits) upon seizure, while specializing in a high-net-worth client base.
In that same vein, Silicon Valley Bank (SVB) catered their services to the tech and startup community, holding roughly $209 billion in assets when it was seized back in March.
Although SVBs services were specialized, they clearly weren’t a small bank in the traditional sense. In fact, more than 40 percent of U.S. venture-backed technology and healthcare companies were customers of SVB at the time of seizure.
It was a similar scenario when the FDIC took over Signature Bank just a few days after SVB fell. Akin to SVB’s cache among the startup community, Signature had been characterized as one of Wall Street’s most crypto-friendly lenders of the past decade before it was shuttered.
In 2022, the Signature team had even tried to “cash out” of their crypto- and blockchain-dominant portfolio as they anticipated waning market attitudes toward the sector—which ultimately came to pass. By December 2022, the writing was arguably already on the wall for Signature, as the bank had total assets of roughly $110 billion and total deposits of about $83 billion.
Fast forward to 2024, and the Republic First scenario paints a story of more personal, localized banking. For starters, Republic First was a primarily consumer bank, operating 32 branches across Pennsylvania, New York and New Jersey.
To that end, Republic First counted $6 billion in assets and $4 billion in deposits as of January, which is only a small slice of the 10-figure totals from SVB, Signature or First Republic.
Further, much of the trouble for Republic First stems from their mortgage loan portfolio, which had “declined substantially in a rising rate environment,” according to a presentation the bank shared with investors last year.
Despite early transparency around the state of the bank’s finances at the close of last year, however, the bank’s attempts to find a buyer before seizure failed as leaders missed key deadlines and plans to shore up assets ultimately failed. Not only was the bank de-listed from NASDAQ in August, but earlier promises of cash infusion from the Norcross-Braca Group failed to materialize as Republic First leaders missed key shareholder deadlines across 2023.
All of that is to say that many of Republic First’s troubles aren’t breaking news to those who had been in business with the bank (although the closure is still frustrating and worrisome for direct customers). In that same vein, Republic First wasn’t in the direct business of funding tech companies or startups—in fact, their specialization in providing mortgages in the consumer lending market is what ultimately led to their seizure.
But with headline-grabbing bank closures now occurring on a seemingly annual basis, it’s worth reminding finance leaders at companies of all sizes about the importance of a diversified capital strategy in the face of potential institutional failure.
A powerful (and underutilized) source of non-dilutive funding are R&D tax credits, which CFOs can use to reinvest a share of the capital they’re already put into their product development.
Each year in the US, businesses can claim up to $500,000 to offset payroll, income or any other tax liabilities related to R&D as part of the IRC Section 41 tax credit. That means up to $500,000 in liquid assets can actually stay in your business’ bank account each year if your team is able to secure a successful claim with the IRS.
By combining decades of combined human expertise in navigating tax code—while also being a team of founders in our own right—with a platform that synchronizes key financial, project workflow and payroll data into a single system of proof, Boast leaves no stone unturned in digging deeper to uncover all of your credit-worthy activities.
This could be one of the most powerful bona-fides in your corner when pitching your solution to potential investors.
To learn more about how Boast combines leading technology with years of expertise in the innovation ecosystem for the industry’s leading R&D tax credit solution, talk to an expert from our team today.
While your product and R&D teams are always striving to do their best work, activities that add value to your business aren’t by default eligible for Scientific Research & Experimental Development (SR&ED) tax credits.
In fact, separating and categorizing all the work that your R&D teams have executed into project “buckets” is one of the key facets of compiling an accurate, defensible and maximized SR&ED claim.
It’s also an activity that the Boast team loves to geek out over for our clients!
This all starts with first understanding the definition of a SR&ED Project versus what we’ll call in this blog a Company Project.
SR&ED projects involve a group of activities that aim to tackle “scientific or technical advancement” where all the work is in support of the same scientific mission.
A Company Project, on the other hand, are workflows that, in concert, only drive commercial advancement: While these activities may be rooted in R&D, they aren’t driving a unique innovation or broadening understanding of technical themes. Instead, the goal of this work is to increase market value or commercial outcomes, first and foremost.
To put a finer point on it, the Canadian Revenue Agency (CRA) has a handy 5-part questionnaire that every CCPC should vet their R&D projects through:
The Canadian Revenue Agency
- Was there a scientific or a technological uncertainty?
- Did the effort involve formulating hypotheses specifically aimed at reducing or eliminating that uncertainty?
- Was the overall approach adopted consistent with a systematic investigation or search, including formulating and testing the hypotheses by means of experiment or analysis?
- Was the overall approach undertaken for the purpose of achieving a scientific or a technological advancement?
- Was a record of the hypotheses tested and the results kept as the work progressed?
Of course, it must be said that SR&ED Projects and Company Projects are NOT mutually exclusive. More often than not, in fact, SR&ED Projects are born out of “hitting a wall” with known tactics or technologies that aren’t accomplishing the end goal of a specific Company Project, such as product development.
It’s defining the project GOALS and aligning the activities—from start to finish—within the scope of a SR&ED Project mission that becomes key to delineating activities that may warrant tax credits, from those that are just supporting commercial goals.
This is at the heart of the first question around Technological Uncertainty: For any activities to qualify, the goal of those efforts must be defined from the start.
This now poses the question of what exactly is Technological Uncertainty opposed to what’s just a general Business Problem.
While your team may be trying out certain methods for the first time, for example, if these techniques aren’t contributing to the overall knowledge base—that is, uncovering something totally new and not yet understood—they may be adding business value, but they won’t necessarily qualify for SR&ED.
Trial-and-error, for instance, to understand a product defect is simply Business Problem solving; the components are already built, and you may not understand how things went wrong, but you’re likely just working to identify an error in a known process—not untangling Technological Uncertainty.
Where these worlds overlap is when companies are looking for new ways to accomplish business tasks that call for innovation. Developing a totally new process to more cost-effectively execute R&D, for instance, may be rooted in commercial gains (cutting costs), but the ultimate goal is around net-new innovation to change how your team executes a scientific process.
It all really boils down to communicating the approach—and digging into the Technical Content prerequisite that demonstrates your goals from the start, and your “systematic process for testing hypotheses” that becomes critical.
It’s absolutely pivotal that your activities are not just recorded but contextualized for your claim to pass the CRA’s threshold for SR&ED funding.
This means identifying in depth the individuals who contributed to the process, the relevant investments—both from a payroll and materials perspective— and, finally, evidence that hypotheses were tested and results were analyzed at each step of the SR&ED project for it to potentially qualify.
This may sound like a tall order, calling on stakeholders across multiple departments—from finance to product to HR—to paint the full picture of your innovation and maximize your SR&ED claim.
But accessing the R&D tax credits you deserve doesn’t need to be a time and resource drain on the teams that should be focused on driving innovation.
With Boast, more than 1,500 companies across North America have worked with us to turn what could be a 60 hour process into just a 5 hour time commitment from your team. From there, not only do we strive to maximize your claim, but we leverage AI to seamlessly integrate your key workflow, payroll and financial data into a single platform of R&D intelligence.
This gives our skilled technical and tax experts a one-stop-shop to visualize your innovation, identify every possible SR&ED claim opportunity, and make the filing process simple and seamless.
From there, our team will already have access to the information they need to work on next year’s claim with even less lead time. And should your claim be audited, we have a single source of truth to defend your claim and ensure you get the money back your deserve, with more than double the industry average for successful SR&ED claim defense.
Interested in learning more? Talk to one of our SR&ED experts today.
Canada’s Budget 2024 was met with what can diplomatically be described as a mixed bag of reactions when it dropped last Tuesday.
While many of the spending commitments outlined were as expected—$23 billion towards housing and infrastructure, and even $2.4 billion toward boosting homegrown AI innovation—policy changes (or a lack thereof) drew ire across the tech community.
For starters, the news landed at the height of the INNOVATEwest conference in Vancouver, where many of the founders, funders and ecosystem partners on hand were baffled by both the continued delays to open banking as well as new Capital Gains taxes.
But buried within much of the disappointment were a few bright spots, including more than $600 million committed toward enhancing Canada’s banner Scientific Research and Experimental Development (SR&ED) program over the next four years.
In addition to that, The Department of Finance also included $3.5 billion in new strategic research grants and more than $2 billion in scholarships targeting cutting-edge technologies—features the government has been touting with a string of news releases to combat the bad press in response to last week’s announcement.
Still, potential SR&ED recipients remain frustrated with the pace of consultations, which will enter a second phase as part of the Budget 2024. This comes as the first phase of SR&ED consultations wrapped last week, a process that had already been delayed following Budget 2022.
We’ll unpack what the line items of the latest budget mean for funding innovation, how leaders in our own innovation community are parsing the news, and strategies for driving innovation in any market.
Despite being one of the strongest economies in the world, Canada remains the only G7 nation yet to establish a formal open banking system as of Budget 2024. While the budget allocated $1 million to the Financial Consumer Agency of Canada (FCAC) to oversee the creation of an open banking framework, there were no clear deadlines on when new policies could come into effect.
Implementing open banking has been a budget priority for the Liberal government since at least Budget 2018 when it was first promised, with many hoping Budget 2024 would finally signal a course change.
This was a serious pain point during the Unlocking a Data Driven Economy breakout session at INNOVATEwest, where moderator Michelle Beyo, CEO & Founder of Finavator Inc., emphasized that Canada is notably behind other economies in launching open banking in particular.
“Brazil even has us beat; they launched their own open banking framework in one year back in 2021 and hit 5 million connected accounts in less than 12 months,” Beyo explained, before listing other nations that have seen success adopting open banking.
The Council of Canadian Innovators (CCI) were optimistic by the steps taken in the budget, however, and despite there being no firm timeline defined by Budget 2024 for an open banking launch, Nick Schiavo, CCI Director of Federal Affairs saw the announcement as welcome news.
“Taking tangible steps forward on open banking is welcome news. Canada has incredible financial innovators, and with the appropriate regulatory framework in place, the sky’s the limit for improved financial services for citizens. The devil is in the details, but in today’s announcement we see a government tangibly moving forward with open banking, and that’s good news,” Schiavo said in a statement.
There were far fewer silver linings in immediate response to the new Capital Gains tax rules outlined by Budget 2024, however.
Effective June 25, 2024, individuals earning more than $250,000 CAD will see the inclusion rate on capital gains jump from 50 percent to 66 percent.
ALL capital gains from businesses and trust will similarly be increased from one-half to two-thirds, while the lifetime capital gains exemption will be raised from $1 million CAD to $1.25 million CAD.
The budget also included a new Canadian Entrepreneurs’ Incentive, which reduces the inclusion rate to 33 percent on a lifetime maximum of $2 million CAD worth of eligible capital gains. To achieve this, the model will increase by $200,000 annually (beginning in 2024) until topping out at $2 million in 10 years (2034).
While the new measures are estimated to immediately bring in almost $20 million in revenue for the government over the next 5 years, many leaders in the Canadian tech community fear the costs will be too high.
One such consequence of the increase in Capital Gains taxation is that VCs may ultimately choose to invest outside of Canada where Capital Gains taxes are lower—which would have a disastrous impact on the innovation community across the country.
This could cause a cascading “brain drain” into the United States with less VC funding to go around in Canada, as founders instead seek incorporation in places like Delaware to take advantage of the more favorable business tax landscape.
“This measure, which effectively taxes innovation and risk-taking, will significantly dampen Canada’s entrepreneurial spirit, stifle economic growth in critical sectors of our economy, and impact job creation. Such policy change undermines Canada’s position to attract the talent needed to grow and scale companies here,” Kim Furlong, CEO of the Canadian Venture Capital & Private Equity Association said on LinkedIn.
While the VC community is understandably upset by the Capital Gains tax news, Budget 2024 did include $200 million over two years toward the Venture Capital Catalyst Initiative (VCCI), a Covid-era initiative aimed at helping entrepreneurs, startups and scale ups “become the next generation of Canadian anchor companies.”
Although the VCCI targets emerging businesses, however, there are fears that it will do little to support growth-phase businesses as they increase their capital gains and enter new tax brackets.
Ben Bergen, president of Council of Canadian Innovators, echoes these concerns in his own statements responding to Budget 2024, emphasizing that capital gains will do “irreparable harm” to Canada’s innovation ecosystem by ultimately penalizing success.
“The fact of the matter is that the best way to boost revenue for the government is to drive economic growth and productivity gains, and the best possible way to do that is by championing the success of Canada’s homegrown innovators,” Bergen’s statement reads.
As a team of innovators, founders and technologists in our own right, we at Boast strive to give members of our global tech community as much access to the innovation capital they deserve to see their ideas take lift.
This includes working with business leaders at all stages of their journey to tap into non-dilutive funding programs—including SR&ED—to stretch the investments their already making into R&D and product development further than ever before.
So when storm clouds seem to be gathering in response to news around the federal government’s stance on funding innovation, your partners and friends at Boast are here to help you navigate (and capitalize on) whatever the market has in store.
Fortunately, the latest budget didn’t substantially impact the generosity of the SR&ED program, which enables any CCPC driving truly unique innovation to recoup a share of their research and development investments and continue driving market differentiation—and ultimately achieving growth.
Best of all? Boast makes it easier than any other tax credit solution to maximize your claim values without putting a heavy burden on your team. We’ve helped more than 1,500 companies across North America complete more than 4,500+ successful claims—all with an industry-leading audit rate and only 5 hours of commitment from customers on average.
To learn more about what sets Boast apart, talk to an expert on our team today.
| What? | Why? | Who is impacted? |
| Capital Gains tax adjustment Individuals earning more than $250,000 CAD will see the inclusion rate on capital gains jump from half to two-thirds. Businesses and trust will similarly be increased from 50% to roughly 66%, while the lifetime capital gains exemption will be increased from $1 million CAD to $1.25 million CAD. | Arguably, the new framework makes Canada’s tax system “more fair” for startups, while bringing in almost $20 billion in revenue over the next 5 years. | According to the tech community, innovators and investors who are willing to put capital into new businesses. VCs may also ultimately choose to invest outside of Canada where Capital Gains taxes are lower—impacting the innovation community across the country. |
| Open banking launch date still not defined. | Despite being one of the strongest economies in the world, Canada remains the only G7 nation yet to establish a formal open banking system as of Budget 2024. $1 million was granted to the Financial Consumer Agency of Canada (FCAC) to oversee the creation of an open banking framework. | Canada and Canadians, as the country continues to lag behind global peers in supporting payments, fintech and innovative banking practices. |
| $600 million to SR&ED over the next 4 years. This includes the launch of Phase 2 of SR&ED consultations. | The government has continued to seek guidance from business leaders on how to enhance the banner R&D tax credit, but remains non-specific on actual action items. | The consultations should be a boon for all CCPCs, assuming funding continues to be offered at least commensurate with current levels. Still, timelines for changes and learnings to date haven’t been shared by federal leaders running consultations so far. |
| $200 million to VCCI | The government will continue to support it’s Covid-era VC fund to help startups and scaleups bring their innovations to reality, despite otherwise tight lending or funding markets. | Canada’s VC ecosystem, as well as startups, who will all benefit from the capital injection through funds-of-funds and direct investments. |
Crowdfunding plays a critical role in modern society, helping people drive creativity and innovation, support social causes and even provide healthcare to individuals and their families—including pets.
But not all digital fundraising platforms are created equal. In fact, many fundraising solutions put barriers between users on both sides of the crowdfunding equation that actually limits how much control they have over funds raised—to say nothing of the capability for users to build community around their cause.
That’s where the team at ConnectionPoint comes in, providing a suite of Federated Fundraising platforms that take out the unnecessary middle men and encourage individuals and organizations to take full ownership of their fundraising journeys.
We welcome ConnectionPoint Founder and CEO Daryl Hatton onto the show to discuss how his team has built the next-generation technology helping organizations, businesses, and individuals create a positive impact in the world through collaborative fundraising. Their solutions ease the process of crowdfunding to be more engaging and socially integrated, offering a rare balance of powerful crowdfunding paired with affordability and effortless usability.
Building this innovative solution has called on Daryl’s impressive experience within the crowdfunding, tech and startup communities. He continues to be an active advisor and partner for an array of innovative social funding and commerce initiatives, and he knows firsthand what it takes to build a successful business by tapping into a wealth of non-dilutive resources.
This includes partnering with Boast to help finance the development of his solution during the height of the pandemic, when venture capital toward philanthropic missions had largely dried up. By leveraging our Quickfund program to advance his SR&ED funding on a quarterly basis as opposed to EOY, for instance, Daryl could keep driving positive outcomes and re-fuel his R&D, ultimately stretching his project development event further.
Darryl explains in this episode how Boast helped him retain ownership and not have to compromise in creating the “collaborative commerce” platform that today has helped raise more than $275 million across 200,000 campaigns.
As Daryl explains, the funding landscape in Vancouver—and really across Canada—is significantly more generous compared to what’s on offer in the United States.
But tapping into the wealth of innovation funding that’s available in the Canadian ecosystem still hinges on having partners who can help navigate the hurdles that are inherent to government-backed financing.
That’s because as generous as programs like SR&ED tax credits are, it takes a combination of both technological and tax expertise to craft a narrative that fully delivers.
Daryl and the ConnectionPoint team are the perfect example of what it means to be a team player in the innovation ecosystem, both in Canada and across the Globe. By helping him build a solution that allows other creators to give their team lift, we’re able to share in the pride Daryl feels every day funding innovation and world-changing ideas.
The Boast team took to Vancouver for the first-ever INNOVATEwest, where tech leaders and members of Canada’s innovation ecosystem came out in full force to celebrate BC-based tech excellence.
Along with catching up with some of our favorite innovators on the floor, the Boast crew was all over the Breakout Sessions and attending each keynote, spreading the word about non-dilutive funding to drive growth across Canada.
One early highlight on Day 1 was Control Freak: How to Raise Growth Capital Without Giving Up Your Company, where our VP of Finance Sonny Gill was joined by Devon Thompson, Noah Shipman, and moderator Shamil Hargovan.
While the group had different perspectives on how businesses can achieve growth across industries and specific markets, a resounding theme included the need for founders to be realistic about runways, and ready to make hard decisions about their partners—including funders.
Specifically, companies need to find financing partners who have experience working in both their industries and target markets that can share relevant expertise, helping tackle some of the hardest challenges at any stage of your business evolution.
Part of Boast VP of Finance Sonny Gill’s discussion of non-dilutive funding in 2024 at INNOVATEwest was the topic of runway, and the realities of how founders should budget to drive innovation without over-leveraging equity.
As Sonny explains, many companies only seek out non-dilutive funding as a last-resort, when it should be playing a role in your capital strategy from the start.
It’s not uncommon for founders to see the teams around them evolve as their business grows. In fact, finding new talent that is best equipped to help you achieve your goals is a healthy part of the startup lifecycle. This applies to both the people on your team as well as the different partners you seek out to develop and even fund your innovation.
These were just a few of the nuggets of wisdom shared by our fearless finance leader Sonny during INNOVATEwest 2024 in Vancouver.
Miriam Dong was also on hand to share her expertise throughout the event and at her Breakout Session on Unlocking a Data Driven Economy, where she and her fellow panelists discussed how some of the buzziest new tech can be used as powerful solutions.
Miriam put it perfectly: Innovation is rooted in problem solving, not just deploying the latest, buzzy tech or hopping on the AI bandwagon.
Generative AI continues to be all the buzz, for instance, but as the panel made clear, companies that deliver meaningful outcomes (and value) will stand apart when it comes to funding.
At Boast we’re incredibly proud to help some of Canada’s most innovative businesses seamlessly access the capital they need to achieve growth and solve bigger problems, helping them stand apart from others seeking their own piece of the booming market.
Our tech-enabled services make tapping into SR&ED easier and less time-consuming so teams can focus on R&D while we handle tax credits.
Back on the expo floor, our team was thrilled to be elbow-to-elbow with fellow innovators who embraced Boast’s ethos: Deliver true value with our tech-enabled services.
Our INNOVATEwest neighbors seoplus+ are a perfect example of innovation in action, applying new techniques and tech to solve legacy problems.
Taking a unique approach to addressing technological uncertainty is at the heart of non-dilutive funding programs like SRED tax credits, which reward innovators for taking risks.
No matter what route you go for funding innovation, there are a wealth of resources on hand at INNOVATEwest to guide you through.
Daphné Poirier-Goupil of BDC joined Paul Davenport to discuss what they’re most excited about as this first-ever conference takes off.
We were boasting about Boast with The Firehood at INNOVATEwest Day 1!
Danielle Brewin Graham and Paul Davenport linked up to discuss the funding opportunities for founders at all stages during last week’s event.
When folks at INNOVATEwest think of SR&ED, they think Boast.
That’s because so many members of the Vancouver tech community have come to us this week to learn more about non-dilutive funding—or they already work with us to help accelerate their innovation.
This includes the team at Goodlawyer who continue to be amazing partners helping support innovators across North America.
Gideon Mentie joined Paul Davenport to chat about his experience at the event so far and the amazing collaboration between our two teams.
As our pal Chris Hobbs of TTT Studios puts it, INNOVATEwest has felt “like running into family members we haven’t seen in a while.”
The community of innovators on the floor during Day 2 was impressive, as we’re spreading the word about leveraging non-dilutive funding to drive even more world-changing ideas.
Chris was the MC over at the AWS Hackathon where he saw some of the amazing tech talent Vancouver has to offer firsthand.
All said, we couldn’t be more thrilled with the great connections we made throughout the event, and we hope to see even more friends and partners next year.
But it doesn’t take an expo for the team at Boast to connect with our favorite innovators across North America. Everyday, we thrive when we get to hear about the innovation driving global change at some of the businesses we work with every day to tap into non-dilutive funding.
To learn more about what sets us apart, talk to an expert with the Boast team today.
