Rewarding Innovation: Improving Federal Tax Support for Business R&D in Canada
Business innovation is viewed by many as a solution to Canada’s ailing productivity performance. One of the more troubling aspects of Canada’s innovation track record is that businesses spend relatively little on research and development (R&D) despite having access to some of the world’s most generous R&D tax incentives. Canada’s low levels of business R&D have called into question the effectiveness of Canada’s generous R&D tax incentives, particularly the flagship federal Scientific Research and Experimental Development (SR&ED) program. A deeper analysis, however, reveals that tax incentives are effective in stimulating more R&D – that is, Canada would have lower levels of business R&D in the absence of these inducements. Instead, the root cause of Canada’s business R&D deficit appears to stem from structural aspects of the economy and, more importantly, a lack of demand-related pressure to pursue innovation.
Volume (Year): (2011)
Issue (Month): 334 (September)
|Contact details of provider:|| Postal: |
Phone: (416) 865-1904
Fax: (416) 865-1866
Web page: http://www.cdhowe.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Richard M. Bird & Michael Smart, 2008. "The Impact on Investment of Replacing a Retail Sales Tax by a Value-Added Tax: Evidence from Canadian Experience," Working Papers Series 15, Rotman Institute for International Business, Joseph L. Rotman School of Management, University of Toronto, revised Jun 2008.
- Braido, Luis & da Costa, Carlos & Dahlby, Bev, 2009.
"Adverse Selection and Risk Aversion in Capital Markets,"
2009-15, University of Alberta, Department of Economics, revised 24 Mar 2009.
- Luis H. B. Braido & Carlos E. da Costa & Bev Dahlby, 2011. "Adverse Selection and Risk Aversion in Capital Markets," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 67(4), pages 303-326, December.
- Jungsoo Park, 2004. "International and Intersectoral R&D Spillovers in the OECD and East Asian Economies," Economic Inquiry, Western Economic Association International, vol. 42(4), pages 739-757, October.
- Duanjie Chen & Frank C. Lee & Jack M. Mintz, 2002. "Taxation, SMEs and Entrepreneurship," OECD Science, Technology and Industry Working Papers 2002/9, OECD Publishing.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2004.
"Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries,"
The Review of Economics and Statistics,
MIT Press, vol. 86(4), pages 883-895, November.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," CEP Discussion Papers dp0458, Centre for Economic Performance, LSE.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the two faces of R&D : productivity growth in a panel of OECD industries," LSE Research Online Documents on Economics 784, London School of Economics and Political Science, LSE Library.
- Griffith, Rachel & Redding, Stephen J. & Van Reenen, John, 2000. "Mapping The Two Faces Of R&D: Productivity Growth In A Panel Of OECD Industries," CEPR Discussion Papers 2457, C.E.P.R. Discussion Papers.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the two faces of R&D: productivity growth in a panel of OECD industries," IFS Working Papers W00/02, Institute for Fiscal Studies.
- Andrew Sharpe, 2010. "Unbundling Canada's Weak Productivity Performance," CSLS Research Reports 2010-02, Centre for the Study of Living Standards.
- Bronwyn H. Hall & John van Reenen, 1999. "How Effective are Fiscal Incentives for R&D? A New Review of the Evidence," NBER Working Papers 7098, National Bureau of Economic Research, Inc.
- Jeffrey I. Bernstein, 1988. "Costs of Production, Intra- and Interindustry R&D Spillovers: Canadian Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 21(2), pages 324-47, May.
- Danny Leung & Césaire Meh & Yaz Terajima, 2008. "Productivity in Canada: Does Firm Size Matter?," Bank of Canada Review, Bank of Canada, vol. 2008(Autumn), pages 7-16.
- Aled ab Iorwerth, . "Canada’s Low Business R&D Intensity: the Role of Industry Composition," Working Papers-Department of Finance Canada 2005-03, Department of Finance Canada.
- Brown, James R. & Martinsson, Gustav & Petersen, Bruce C., 2015.
"Do Financing Constraints Matter for R&D?,"
Working Paper Series in Economics and Institutions of Innovation
394, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.
- Charles I. Jones & John C. Williams, 1997.
"Measuring the social return to R&D,"
Finance and Economics Discussion Series
1997-12, Board of Governors of the Federal Reserve System (U.S.).
- Bev Dahlby, 2008. "The Marginal Cost of Public Funds: Theory and Applications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262042509, June.
When requesting a correction, please mention this item's handle: RePEc:cdh:commen:334. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Kristine Gray)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.