This report compares the R&D spending of Canadian and U.S. firms in advanced sectors. It finds that U.S. firms spent almost 103 times more on R&D than Canadian firms in 2021, despite the U.S. GDP being just 11.7 times greater than Canada's. U.S. headquartered firms' R&D spending in advanced sectors rose from 80% above the global average in 2013 to nearly 100% above average in 2021, while Canadian headquartered firms' spending declined from 68% below the global average to 78% below. The report suggests that the Canadian government should consider reforming and expanding its SR&ED tax incentive to be more in line with the U.S. Alternative Simplified Credit.
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