BC Startups: The Government Is Not Your Friend

  • Eligible Business Corporation (EBC) investment credits
  • the National Research Council’s Industrial Research Assistance Program (NRC-IRAP)
  • the Scientific Research and Experimental Development (SR&ED) program

EBC: Great for angels, bad for founders

Founder-hostile

Triples accounting fees

Notice to Reader bill for $5,250 (FY2013) vs. Review Engagement bill for $17,800 (FY2014). Some elements redacted for privacy.

Uneven playing field

NRC-IRAP: Faustian bargain

Don’t ever change

  • is prohibited from selling the intellectual property it developed during the project
  • is prohibited from being acquired by a foreign (non-Canadian) entity
  • must continue to develop and commercialize the project, regardless of its commercial viability
  • must continue to exist, and demonstrate financial solvency sufficient for sustained project execution and commercial exploitation

Picking winners

SR&ED: The startup killer

Chief Paperwork Officer

Time attribution by source commit (messages redacted). Claims require at least this level of detail for all relevant employees, although the CRA prefers per-hour time sheets.
A supporting evidence index, organized by employee and the required 12 categories (file and employee names redacted)

Founders: You’re on your own

The claim preparer disclosure table, from form T661E

Long delays preceding adversarial audits

Bad debt

BC: Good despite government

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Decent guy. Co-founder of Tapstream.

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Ben Fox

Ben Fox

Decent guy. Co-founder of Tapstream.

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