U.S. Election Effects on Canadian R&D Tax Credits & Grants

November 8, 2024

As the U.S. undergoes post-election shifts, Canadian businesses with cross-border interests are closely watching how changes in American policies on R&D tax credits and grants might affect their operations. The U.S. government frequently revisits its support for R&D, especially in critical areas like technology, clean energy, and health sciences. These potential policy adjustments could have ripple effects on Canadian businesses, especially those with American subsidiaries or cross-border R&D projects. 

1. Potential Expansion of U.S. Research & Development Incentives and Impact on Canada

If the U.S. decides to enhance its research and development incentives, making them more attractive, Canadian companies may be inclined to allocate more R&D resources to their U.S. operations to take advantage of these opportunities. This could affect where Canadian businesses choose to base research facilities and could shift R&D budgets toward American projects. 
In response, Canadian policy makers might feel pressure to increase domestic R&D support, perhaps by strengthening programs like SR&ED or IRAP, ensuring Canadian businesses stay competitive. This is especially relevant in sectors where both countries already have significant cross-border collaboration, such as artificial intelligence, biotechnology, and renewable energy. 

2. Sector-Specific Developments with Cross-Border Implications

Certain U.S. policy changes might impact specific industries. For example, if the U.S. government boosts support for clean energy, Canadian companies in this sector could find new opportunities for collaboration and potentially increase access to grants. In sectors like digital health and cybersecurity, where both countries have significant research efforts, U.S. funding incentives could encourage more cross-border R&D projects and innovation. 

3. ABGi Canada’s Expertise in International Tax Optimization

ABGi Canada is well-positioned to support Canadian businesses navigating these international shifts. Specializing in Research & development tax optimization, ABGi Canada leverages its expertise to help companies maximize their R&D credits and grants across borders. With a U.S. branch, ABGi offers a seamless approach to navigating R&D incentives in both Canada and the U.S., assisting companies with international tax strategies, regulatory compliance, and cross-border incentive optimization. By partnering with ABGi Canada, businesses can align their R&D efforts to take full advantage of incentives in both countries, achieving global tax efficiency and strengthening their competitive position. 

To learn more about how ABGi Canada can help optimize your R&D tax strategy on both sides of the border, please reach out to our team for a consultation. Let us support your business in maximizing its R&D incentives and navigating the complexities of international funding opportunities.