Saskatoon’s Solido Design Automation Inc. has more than $1.5 million in new money to spend on research and development after receiving a special Canada Revenue Agency (CRA) tax rebate Thursday.
The company, which designs software used by firms around the world for electronic chip manufacturing, earned CRA scientific research and experimental development (SR&ED) investment tax credits in 2007 and 2008 combined. Amit Gupta, Solido’s president and CEO, accepted the SR&ED tax rebate from National Revenue Minister Jean-Pierre Blackburn on Thursday.
"The big trend right now is to export R&D operations to China and India," Gupta said. "As a result of this SR&ED program, it becomes cost effective for us not to export those jobs and keep those jobs here locally in Saskatoon."
The company has been receiving benefits through the SR&ED program since it began operations in 2005. Gupta said the new money will allow the company to hire more staff and purchase equipment.
"The vast majority of investment is the people itself, because it’s the people who are developing the software, it’s the people who are testing the software, it’s the people who are releasing the software. It allows us to create jobs, essentially, so the people we have right now, plus the hires that we’re making, will grow our company."
The software firm employs 12 people in Saskatoon as well as four people in California, one person in Japan and one person in England.
Solido is one of 185 Saskatoon companies receiving benefits from the SR&ED program. The CRA distributes about $26 million annually to the local companies in tax rebates and credits.
Blackburn said investing in the science and technology sector is one of the ways the federal government is working to stabilize and expand the national economy.
"We really feel for this country to stay as a leader . . . our companies (need to) do that kind of research, and when they find that new technology and they apply it to their products, it’s a way for themselves to sell their products all around the world and create jobs here in Canada," he said.
Companies that fall under the parameters of the program and report taxable income of $400,000 and under receive tax rebates, while companies reporting taxable income of more than $400,000 receive tax credits.