In mid-February, the Canada Customs and Revenue Agency (CCRA) introduced a program by which farmers will be able to claim ‘Scientific Research and Experimental Development’ (SR&ED) tax credits for the portion of check-off funds paid to participating farm organizations used to support eligible research projects. This program has been in development over the past year in part as a result of efforts by OCPA, the Ontario Agricultural Research Coalition (OARC), other Ontario farm organizations and several national farm groups.

The key features of the program include, (using OCPA as an example):

• OCPA submits a single ‘program participation request’ (Form T661) on behalf of
our members.
• OCPA calculates the percentage of the total check-off received that is applied to
SR&ED eligible projects (as approved by CCRA) and reports this to OCPA members via the newsletter.
• Farmers, individually, use this percentage to calculate their eligible SR&ED
contribution based on their total check-off paid to OCPA. Farmers would also pool their eligible SR&ED contributions for all participating commodities, and the total tax credit is claimed (Form T2038 for individuals, form T2SCH31 for farm corporations) through your annual tax return.
• Research investments meeting the criteria of the SR&ED program and made
after January 1, 2001 are eligible for the tax credit. Farmers have up to 17.5 months following the end of the year for which they are claiming SR&ED tax credits to apply for their credit. For example, tax credits for the calendar year of 2001 can be claimed up to 17.5 months after Dec. 31, 2001.
• In OCPA’s case, the Research & Technology Committee and the Board of
Directors would continue to make decisions on behalf of the members on which research projects are supported. OCPA needs to continue communicating results of SR&ED research projects to OCPA members (through articles in the magazine) to ensure they have preferential access to the results.

Before our members can claim their SR&ED tax credits, OCPA must:
• Determine which projects supported in 2001 are eligible for SR&ED tax credits,
calculate the ‘SR&ED percentage’ of OCPA’s check-off funding, and notify our members via the newsletter. Whether we can achieve this for the April Newsletter cannot be assured at this time, since the process involves consultation with CCRA. (If unable meet this years tax return deadline, OCPA members will still be able to make their claim for 2001with next years tax return).
• Present a resolution at the upcoming OCPA Annual Meeting on March 6,
seeking ratification of the membership that “OCPA is designated to act on behalf of its members in all matters related to SR&ED tax credits”.

OCPA welcomes this program as a step forward, since farmers will now have an opportunity to claim tax credits which were previously inaccessible to them.

Unfortunately, the tax credits available to OCPA members will range from a just a few cents to about $450.00 per year, with an average of about $13 per year for our ‘average’ OCPA member. Consequently, many OCPA members may not claim their rightful tax credit due to the effort involved. Further, OCPA will have no way of knowing whether all, none, only a few, or the majority of our members claim their credits.

Regular readers will recognize that OCPA’s goal to be able to claim the collective SR&ED tax credits of our members, and reinvest this on behalf of our members in further research. In OCPA’s case, this credit could amount to roughly $60-80 thousand or more annually. However, this would require a change in tax legislation, and to date, representatives of Finance Canada have ignored our requests to meet with them on this issue. Nevertheless, we will continue to work on this goal, even as we proceed with the necessary steps to allow OCPA members to claim the SR&ED tax credits for which they are now eligible.