July 2010 Issue 21

Message from the Managers

Many of you have December Year Ends; the filing deadline for your SR&ED claim would have been the end of June (six months after your year-end date for fast track submissions, or 18 months after your year-end date for the absolute deadline). Now that your claim has been filed, the next phase of the SR&ED process begins: preparation for a potential review.

Remember that an SR&ED review does not have to be a bad thing - at Northbridge, we help you "Embrace the Review" process. You are entitled to your credit or refund and the CRA simply wants to confirm that your claim is eligible for the program. Together, we will be prepared and the review will go quite smoothly. The SR&ED division of the CRA works completely separately from the tax audit side of the CRA; no information about your company gets shared between the divisions, and an SR&ED review will never trigger a tax audit.

If and when the CRA calls for a SR&ED review of your claim, your Northbridge Consultants Account Manager will be with you every step of the way during the review process. Here is how we help you prepare:

• We help gather and prepare documentation. Documentation provides a start-to-finish "story" of each project and is vital to show the reviewer that all of your projects meet the three qualifications for the SR&ED program (technological uncertainty, technological advancement, and technical content).
• We conduct a pre-review. In these pre-review sessions, we will go over the typical agenda of a review, and discuss the types of questions that you are likely to be asked by the reviewer.
• We are there with you throughout the review. We will be there to act as a facilitator between the reviewer and yourself, in order to make sure there is no miscommunication or misinterpretation.
• We follow up with the CRA after the review has concluded. Occasionally, the CRA reviewer will ask for additional documentation or support materials after the on-site review has concluded – we work with you to provide the additional information and act as a direct communication link to the reviewer.

Keep in mind that you may not have a review requested for up to four months after your claim has been submitted, but it's never too early to start gathering supporting documentation (drawings and sketches, prototypes and photographs, testing sheets, hour and material cost spreadsheets, invoices, etc.) so you are well prepared. If you are unsure what type of documentation you will need for a review, or where to look for it, remember that your Account Manager is available to answer any questions about the SR&ED review process. Our first priority is to make sure that you receive the maximum amount that you are eligible for through the SR&ED program!

Best Regards;
Michael Crozier (Group Manager, Technical Services) & Jen Mahon (National Manager, Strategic Growth)
Northbridge Consultants

Testimonial

“We had previously claimed for SR&ED internally before working with Northbridge on our most recent claim. Northbridge included a number of items in the claim that we would not have, had we been claiming again on our own. Through Northbridge, we ended up receiving a much higher percentage of our claim back than previously. Working with a company that specializes in the SR&ED program allowed us to focus more on running our business, while still receiving the benefits that the SR&ED program provides”

— Paul Sammut, President of Silent Exhaust Systems Inc.

Silent Exhaust Systems Inc specializes in the design, development and production of high-quality exhaust products for off-road engines. www.silxsys.com

On the Blog

Northbridge continues to bring you the latest updates and hot topics that are important to our clients. Some of our June highlights:

• Fact or Fiction: My trade secrets aren’t safe! One of the concerns that cause some companies to question claiming for the SR&ED program is how confidential their information will remain. We take a look at this misconception of the program.
• Ten Tools To Increase Your Productivity. In our Ten Quick Tips series, we take a look at ten online tools that can be used to increase your productivity at the office.
• Profits Increasing. StatsCan released results for the first quarter of the year - profits in manufacturing sectors increased for the fourth quarter in a row.

Read about these topics and more on our blog.

In the News

Wind Turbine Energy: The Final Frontier?

As the need for alternative energy sources increases, wind turbine energy grows more appealing. In fact, wind energy has been recognized as one of the world’s fastest-growing new energy sources. They can be set up quickly and cheaply compared with building new coal-fired generating stations or hydroelectric facilities. The environmental impact of large wind turbines is insignificant compared with open pit coal mines or reservoirs, and while in operation they produce no air pollution. Those are just a few of the advantages to utilizing wind energy but let’s take a closer look at the facts;

• The average Canadian household consumes 700 – 1500 kWh (kilowatt hours) per month.
• Global investment in wind energy is projected to bring installed capacity worldwide to more than 600,000 MW by the year 2020 (1 megawatt = 1,000 kilowatts).
• Wind farms in Canada currently have capacity of 3,432 MW (enough to power over 1 million homes or the equivalent to 1.1% of Canada’s total electricity demand).
• Canada's wind energy industry has had an annual average growth of 30% over the last 5 years.
• For every 1,000 MW of new installed wind generation capacity today, there are 1,000 jobs created.
• If 20% of Canada’s electricity was alternately supplied from wind energy by 2020, there would be a minimum of 50,000 new full-time jobs created (Canada’s hydroelectric resource provides about 60% of Canada’s electricity).
• The same target would create a $3 billion opportunity for operations and maintenance services over the life of the wind farms.
• Roughly 27% of the world’s energy gets lost in energy transmission and generation.
• The external costs for energy sources are approximately as follows:
  • Nuclear Energy: 0.5 cents/kWh
  • Coal: 5.1 – 8.8 cents/kWh
  • Gas: 1.6 – 2.8 cents/kWh
  • Wind: 0.1 – 0.2 cents/kWh

Events

Northbridge recently participated in the Canadian Association of Recycling Industries (CARI) Annual Convention 2010 in PEI. Two hundred people attended the national conference. It was a fantastic event for all who attended.

Northbridge will be exhibiting in and speaking at the Canadian Greenhouse Conference at the International Centre in Toronto, Ontario on October 6th and 7th. Be sure to stop by and say hello!

Dates to Remember

Head Office:
70 Cowansview Rd
Cambridge, ON N1R 7N3
T:519.623.2486
F:519.623.5654
E: Contact Us

Atlantic Office:
135 Rockmanor Road
Bedford, NS B4A 2Y9
T:902-444-1916
F:902-444-1916
E: Contact Us

While we endeavor to ensure accurate information through this newsletter, it is not a definitive analysis of legislation, or a substitute for professional advice. Please seek professional advice if attempting to relate specific situations to the information disclosed within.