With a boom of microbreweries in Canada in the last decade, there is a lot of innovation going on in the beverage industry that could be eligible for tax incentives. Richard Hoy, President of Catax Canada, looks at what the average claim is worth and what is driving this progress.
Since 2019, the Government has put more effort than ever before into promoting innovation in the beer industry, as well as modernizing the regulations that impact how they are able to sell to the public.
The list of ingredients a drink must have for it to be labelled as ‘beer’ has been reduced, and this greater flexibility means companies are more competitive and can be more imaginative with the types of beer that they can produce.
Beer is Canada’s most popular alcoholic drink, making up close to half of all sales in alcoholic beverages. What’s more, Canadians are a stickler for domestic brewers which produce 84% of the beer purchased in Canada.
The number of brewers in Canada is growing and they are using an ever-expanding array of equipment to achieve the new blends and flavours that have come to characterise this market.
The efforts of the Government to drive innovation in this sector goes hand in hand with the tax incentives being offered by the CRA in the form of the Scientific Research and Experimental Development (SR&ED) tax credits.
Under this program, we have been able to work with our clients in the brewing sector to secure an average of more than $36,000 (CAD) in benefits. Investing in your business really can pay off.
With sustainability also a prominent part of the research and development in the brewing industry, businesses aren’t just looking at the product but also at the packaging. Recent examples of innovation in this area include the development of the KeelClip packaging system — a minimal material fastener solution made of recyclable fibre paperboard. This is the kind of innovation that the CRA is looking for when it comes to SR&ED claims.
Canada is rightly proud of its beer and we are seeing first-hand just how keen breweries are to drive choice and quality up with innovation.
For more information about the tax incentives available to the beverage industry, you can reach Richard Hoy directly at Richard.Hoy@catax.com.
2. Catax claims data