The Lowest R&D Cost in the G-7
Costs in R&D-driven Sectors up to 12.9 percent lower than in the United States
Clear advantages of doing research and development in Canada—KPMG’s Competitive Alternatives 2010 reports that the cost of R&D in Canada is the lowest in the G-7, and the cost is as much as 12.9 percentage points lower than in the United States (see figure below).
Source: KPMG. Competitive Alternatives 2010.
Figure: Cost Advantage/Disadvantage Relative to the United States in Research and Development (Percentage)
Source: KPMG. Competitive Alternatives 2010.
Details of the above chart- United States: Baseline
- Mexico: 38.90%
- Australia: 18.70%
- Netherlands: 16.30%
- Canada: 12.90%
- France: 6.20%
- United Kingdom: 2.90%
- Italy: minus 6.80%
- Germany: minus 10.80%
- Japan: minus 16.40%
Lower labour costs lead to lower R&D cost—In Canada, scientific talent is available at competitive costs. In high value-added activities, Canada offers the advantage of lower labour costs compared to its peers in advanced economies.
One the most generous R&D tax incentives in the industrialized world—The Canadian Scientific Research & Experimental Development (SR&ED) tax credit program offers a 20-percent non-refundable tax credit for qualifying research expenditures over $3 million and a 35-percent tax credit for qualifying research expenditures under $3 million. Combined with the tax credits from provincial governments, foreign investors can save an average 30 cents on the dollar invested in R&D in Canada.
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