Ontario Budget Reduces SR&ED OITC

The February 25, 2016 Ontario Budget introduced changes to the provincial SR&ED program. The Ontario Innovation Tax Credit (“OITC”) was reduced from 10% to 8%. At the same time the non-refundable ORDTC was reduced from 4.5% to 3.5%.

While the combined R&D credits (11.5%) are still nominally greater than those offered by most provinces, for early stage companies facing startup losses this will hurt a little. While Ontario’s neighbour to the east – Quebec – also reduced their incentives recently, their incentives are significantly more lucrative.