Biotech industry campaigns for tax changes

September 25, 2006
Ottawa Business Journal


Canada's biotech industry will be blitzing key federal decision makers this week as part of an effort to stress the need for financing and a tax environment that encourages small business growth.

Over 50 biotechnology industry leaders will call on MPs, cabinet ministers and senior federal officials and over 60 meetings have been scheduled. As well, BIOTECanada and its members will appear before the House of Commons finance committee as part of their pre-budget consultations for 2007.

Peter Brenders, president and CEO of BIOTECanada, says there is "unprecedented interest" among the group's members in presenting their message to government.

They will come armed with the results of a public opinion poll that found over 80 per cent of Canadians agree the federal government should find ways to help support Canadian biotechnology companies develop new products. Almost 90 per cent said Canada's health care system should be willing to pay more for advances in new health biotechnologies.

"According to our polling data, Canadians consistently support biotechnology research and recognize there are benefits to agriculture, health and environmental applications of biotech," says Mr. Brenders. "These range from new, healthier foods to targeted medicines, and the ability to use renewable resources to clean up and fuel our society."

The group will be pushing for changes to the Scientific Research and Experimental Development program, a federal program that offers tax breaks to companies that conduct research and development. The current program was created in 1985 and since then there have been no changes to the expenditure limit of $2 million.

"BIOTECanada and its members are looking to increase the annual expenditure limit, remove eligibility restrictions to Canadian-controlled private corporations, and adjust taxable income and taxable capital thresholds used to determine eligibility for refundability," says Jim Hatch, chair of BIOTECanada's emerging companies advisory board.

In a recent survey conducted in partnership with PricewaterhouseCoopers, Canadian biotech CEOs said they are each looking to raise between $10 million and $15 million over the next two years.

"Financing is essential for our industry, and improved tax programs would benefit our companies a great deal," says Mr. Brenders.