Is Canada on the path to innovation success
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The document discusses Canada's innovation landscape, highlighting the importance of translating ideas into valuable products and the government's role in supporting research and development (R&D). It emphasizes the need for a comprehensive approach to funding across various sectors, rather than favoring select industries, to maximize economic growth. Additionally, it notes the significant role of clean technology in the Canadian economy and the connection between academic institutions and startup creation.
Is Canada on the path to innovation success
- 1. Is Canada on the path to innovation success? Paul Young CPA, CGA March 26, 2017
- 2. Paul Young – Bio • CPA, CGA − 26+ years of Corporate Finance and Business Solutions − 17+ years in corporate finance and reporting − 11+ years of analyzing government policies − Blogger – Financial, Economic and Business Trends − 8+ years in academia • Advance Accounting • Advance Management Information System • Public Finance • Advance Finance • Audit Risk and Controls
- 3. Agenda • What is innovation? • Defining innovation • Accounting for innovation • Tax Treatment / Canada • Tax Treatment / USA • How to handle R&D? • R&D / Canada - Trends
- 4. What is innovation? • The process of translating an idea or invention into a good or service that creates value or for which customers will pay. To be called an innovation, an idea must be replicable at an economical cost and must satisfy a specific need. Innovation involves deliberate application of information, imagination and initiative in deriving greater or different values from resources, and includes all processes by which new ideas are generated and converted into useful products. In business, innovation often results when ideas are applied by the company in order to further satisfy the needs and expectations of the customers. Source - http://www.businessdictionary.com/definition/innovation.ht ml
- 5. Defining Innovation • Innovation can mean different things to different people − Productivity improvements − New product − New product enhancements
- 6. Accounting for innovation Source - https://www.bdo.ca/getattachment/7cf1499b- bbd3-44e8-8c35-26f8f30d5ac1/attachment.aspx/ Accounting Standards • IAS 38 (IFRS) • FASB (SFAS-2)
- 7. Tax treatment – R&D – Canada • Source – Deloitte and Touche
- 8. Tax treatment – R&D – USA • Source – Deloitte and Touche
- 9. How to handle R&D • It is best to reach out to large firms like PWC, Deloitte, Ernst & Young, BDO and KPMG as part of your R&D filings • You many also want to reach out to all levels of government as part of accessing research grants • You may also want to build reporting model/solution using analytics - http://www- 03.ibm.com/software/products/en/plann ing-analytics
- 10. Fast growing Companies/Canada Source - http://www.profitguide.com/manage-grow/success-stories/2016-profit-500-facts- about-canadas-fastest-growing-companies-107201 • Many new companies start either via University/College students or people working in a particular industry • Initial startups have to raise capital to fund their business, i.e. investors • The fast pace of development, especially in areas like IT have allow companies move ideas from incubation to market. • There are many research hubs across Canada that were spawn by work done at either university or colleges
- 11. Federal Government / Canada • Main focus is clean technology − Clean technology is $50B business in Canada • SDTC - https://www.sdtc.ca/en/portfolio/project s • Many innovation funds available for companies - https://www.slideshare.net/paulyoungcga /federal-government-programs-to-support- innovation-and-business
- 12. Comment / IT World • Source - http://www.itworldcanada.com/article/budget-2017-a- big-miss-on-innovation-opportunity/391737 IT World – March 24, 2017
- 13. Natural Resources/Canada Source - http://samssa.ca/key-federal- budget-2017-highlights-mining-innovation- supply-service-support-perspective/ • Government put little emphasis on natural resources • Natural resources are key component of finished goods for clean technology, food, aerospace and automotive • There are limited reserves in areas like vanadium, lithium and rare metals
- 14. Comment – Press Reader Source - https://www.pressreader.com/canada/the-globe-and- mail-bc-edition/20170324/281814283690971
- 15. Summary • Innovation is key for Canada, especially as part of growing/expanding the economy • Picking winners and losers is not the role of government • There needs to be clear map on how moneys will flow from government as part of maximizing the funds • The government needs to focus all on sectors not just a few sectors.