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Innovation Canada: A Call to Action

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<strong>Innovation</strong> <strong>Canada</strong>: A <strong>Call</strong> <strong>to</strong> <strong>Action</strong>Figure 6.2 Tax Subsidy Rates on Investment in R&D for Selected Countries, 2009 aLarge Small Combined BERD IntensityFirms Firms Large/Small Combined Ranking inCountry (%) (%) (%) Ranking the OECD (2008)France 38.6 47.6 40.2 1 14Spain 34.1 36.9 34.5 2 24<strong>Canada</strong> 26.9 46.0 30.2 3 18India 29.3 31.7 29.7 4 — bBrazil 28.9 33.0 29.6 5 — bIreland 26.2 26.1 26.2 6 19UnitedKingdom 21.1 22.8 21.4 7 16Japan 18.0 23.2 18.9 8 4China 17.4 18.8 17.7 9 — bNorway 15.9 24.6 17.4 10 22Australia 14.2 15.5 14.4 11 12Korea 12.1 14.2 12.4 12 5Netherlands 10.0 12.2 10.3 13 21UnitedStates 9.1 10.0 9.2 14 7Italy 4.9 17.5 7.0 15 25Finland 3.1 3.4 3.1 16 2Sweden 2.1 3.2 2.3 17 3Germany 1.6 3.3 1.9 18 10Switzerland 0.4 2.6 0.8 19 6RussianFederation 0.2 0.6 0.3 20 — bUnweightedaverage 15.7 19.7 16.4Median 15.1 18.2 15.9abThe data in this table include income tax deductions. They also include R&D tax incentives provided by sub-nationalgovernments.Not a member country of the OECD.Source: Department of Finance (2009); and OECD (2011) for the rankings for BERD intensity (BERD as a percentage ofGDP) in 2008.government needs <strong>to</strong> focus its innovationsupport more sharply on the strategic objectiveof growing innovative firms in<strong>to</strong> largerenterprises — a key means of achieving thescale required <strong>to</strong> realize the Panel’s vision of aCanadian business sec<strong>to</strong>r that stands shoulder<strong>to</strong>-shoulderwith the world’s innovation leaders.For this reason, coupled with stakeholder callsfor increased direct support, the Panel believesthe government should rebalance the mix ofdirect and indirect funding by decreasingspending through the SR&ED program anddirecting the savings <strong>to</strong> complementaryinitiatives strategically focussed on serving6-4

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