[mmastrac]

This line-item is basically a smokescreen for cutting all sorts of other important things (like the research tax credit, SR&ED; various social programs; the budget for our national broadcaster, the CBC; and the salary of the Chief Electoral Officer):

http://www.reddit.com/r/canada/comments/rjrfn/the_budget_5_b...

Amusingly this particular cut was actually a private member proposal from the NDP (the left-most mainstream party).

[dstein]

from reddit:

  SR&ED is [reorganized.]

Whew, so it's not completely axed. If anything Canada needs significantly more investment and tax programs like this. Brain drain has always been a problem for Canada because of the lack of investment from the government and the lack of tech-oriented VC.

[cperciva]

I was hoping for SR&ED to be completely axed. It's a huge monstrosity of paperwork, to the point that small businesses pay 30% of their tax credits to consultants who fill out the forms for them and large businesses hire teams of people for the sole purpose of tracking and classifying SR&ED expenses so that the tax credits can be claimed. I suspect that Tarsnap is eligible for some SR&ED credits, but it's simply not worth the time and headaches it would cost me to claim them.

If Canada wants to encourage innovation, they should set up a system which rewards people for doing new and innovative things, not a system which rewards people for being good at filling out forms.

[unconed]

I've filed SR&ED claims for multiple years for a successful startup. It was a) incredibly valuable and b) incredibly easy.

That said, I do know there are plenty of zombie companies that filed SR&ED claims with a bunch of handwaving and hogwash in it. In fact, it was recommended to me to not make any project sound like it's finished: that way, you can file again next year.

But if you waste 30% of your credit on consultants, you're the one being an idiot, not the government.

[chrisdinn]

I've successfully written SR&ED applications myself for businesses certainly less deserving than Tarsnap. We decided the consultants were too expensive and gave it a shot ourselves. One solid week of work for one guy at a company of 10 people netted $30,000, definitely worth the time. All you need is a decent record of work done (I used both github commit log and a bug tracker.)

Unfortunately I expect you'll never get money from a bureaucrat without a little paperwork. Still, you're missing out if you don't even try.

[erohead]

Talk to Ernst & Young. They will help startups file for SR&ED for a flat fee of $1-3k. Takes a few hours to draft the document with their help. It is not as hard as it sounds.

[wildmXranat]

While it is a big headache to trac, document work and formulate and application, it is most definitely worth it. I've been part of a team that has claimed small sr&ed pieces of work and managed to get back a substantial credit. I agree that there should be a more stringent vetting of applications as this is our tax payer money we're talking about.

[skylan_q]

From what I've heard, they're getting rid of tax credits and moving more to an RFP or grant-based system.

[mcantelon]

From skimming the news it seems like it's cut significantly.

>The changes include a cut in 2014 to 15 per cent from 20 per in the tax credit rate and a restriction on which expenditures count toward the credit. For example, capital expenditures – buildings, equipment and product prototypes – will no longer be eligible. The amount of eligible overhead expenses and subcontracted R&D will also be reduced.

http://www.theglobeandmail.com/report-on-business/economy/gr...

Bad news for Canada's tech innovators.

[aoprisan]

how is this even remotely a smokescreen? it will save money and lower costs for businesses in the long term.

[Natsu]

I believe he's arguing that this is a good change that will get a lot of press. With that creating an opportunity to make a lot of bad changes while everyone is focused on this.

Not being up on Canadian politics, I won't take a position on whether or not that is correct, except that the US is in the same boat and I would like it if they would get rid of our penny.

I know there are people who say it's traditional and whatnot, but I don't see anyone clamoring to bring back two or three cent pieces.

[dfc]

I'm not very familiar with canadian politics. Why is it amusing that the NDP proposed this?

[redthrowaway]

This isn't the Canadian Budget; it's the budget proposed by the ruling Conservatives. This item will likely generate the most buzz and goodwill for the budget, and it was proposed by the current Opposition NDP, who are socialists.

So, the greatest PR windfall for the Conservatives will have come from their biggest ideological and political opponents. It's mildly entertaining.

That said, as the Conservatives have a majority (>50% of seats in the House of Commons), there's no chance that the budget would fail, triggering a vote of non-confidence and a general election. So it wasn't a vote that had any real importance politically, but it will serve to generate public goodwill, which they could use. The Conservatives currently only have a majority because of the ineptitude of the Liberals and Quebecers' fatigue with the Bloc Quebecois. Most Canadians are to the left of the Conservatives, have only warily entrusted them with power, and only then because the center-left liberals couldn't get their shit together at election time.

[mhyee]

The party that implemented this is the Conservative party, the right-most mainstream party. The two parties generally don't see eye to eye, to put it lightly.

[dhughes]

The Conservative party was decimated years ago and was nearly eliminated then eventually the Reform Party which became the Canadian Alliance merged into the Conservative party (both parties were dead anyway).

Reformers were certainly farther right compared to the members of the old Conservative party. Now there is a Conservative party it's the same skin on the outside but fundamentally different, it couldn't be more different, it's pretty much the Reform Party 2.0 yet people see "Conservative Party" and vote for it.

That's my take on it anyway.

[dhughes]

It's difficult finding a comparison since the US only has a two-party system.

Maybe an example something like Ralph Nader suggesting something and Nixon doing it.

Or more modern George W Bush following the advice of Jon Stewart.

Anyway (the far?) right agreeing with the left is odd.

[gyardley]

Not particularly far to the right.

Setting aside the Quebec-only Bloc, the three main parties in Canada are center-right, centrist, and center-left. They all like to claim the others are extremists, but all of them have perfectly mainstream views.

[s3graham]

There's another party! And yeah, she's pretty centrist too.

[run4yourlives]

Except for that whole "wifi is going to irradiate us" stance.

[huggyface]

Say that it's a "smoke screen" is needlessly partisan. It is, indeed, a line item. It deals with something that has come up for consideration since the 80s. If it gets attention, it gets attention.

But do you think no one notices the other changes because they're ditching the penny? That is preposterous.

[wisty]

Memo by Jo Moore, British special adviser and press officer, 2.55pm on September 11, 2001:

> It's now a very good day to get out anything we want to bury. Councillors' expenses?

It's an extremely common practice to release unpopular information, or pass unpopular bills when something else is bound to hit the front page.

[huggyface]

The penny change in no way is distracting from other parts of the budget, and as tabbyjabby mentioned it is focused on here because it has cross-border novelty that the other parts of the budget don't. But among Canadians it is a meh change -- we electronically pay for almost everything now, so the nickle will follow in short order.

[yay_cloud]

It might be construed as a partisan comment, but that is exactly how politics works. After working on a few campaigns (and leaving in disgust), a politician or party will gladly pocket an easy but visible decision like this in order to "steal eyes" away from other -- less positive -- changes or events.

[tabbyjabby]

Ok, but in this specific case, the premise of this being an item that is stealing attention away from the more significant cuts in the budget simply isn't consistent with reality. Go to any national Canadian newspaper. The headline will not refer to the elimination of the penny; it will refer to changes to Old Age Security, or cuts to the CBC. The penny has been but a footnote to budget news. The reason that is the only item of the budget getting attention on HN is because I don't think any non-Canadian HNers really care that our retirement age is now 67, or that health transfers to the provinces have been reduced in this budget.

[JimmyL]

The newspaper headline doesn't matter; what they're aiming for is controlling the message that's shared over coffee between friends, at the water-cooler, on the office IM feed, etc. In that context, all anyone will talk about is cutting the penny.

If this seem familiar, last time around it was changing the words to O Canada (http://www.cbc.ca/news/arts/music/story/2010/03/03/o-canada-...).

[lambersley]

I concur.

The reason this topic generates chatter is because its simple to understand. My teenage sister gets it, my 7 y/o gets it, the homeless person at Union understands and the Bay St exec gets it. Its not obviously complicated. It takes $0.16 to make a penny. Its eradication will save millions in Gov't spending. "It costs 1.6 Canadian cents to produce each one cent coin and stamping out the penny will save around C$11 million ($11 million) a year." (1)

The other proposed budget topics aren't so easily understood by the general public. Old Age Security? Greater than 40% of Canadians are <30 years old (2). This isn't likely to be the prevailing conversation topic. CBC? Canadian Crown Corporation? Really? Who knew? Who cares? Who understands the impact?

I don't think mass media has conspired to fool the common man (in this case anyway). Its just a simple conversation topic.

Edit: There really isn't any complication since only cash payments are effected (3)

(1) http://news.nationalpost.com/2012/03/30/canada-penny-federal...

(2) http://www40.statcan.gc.ca/l01/cst01/demo10a-eng.htm

(3) http://www.budget.gc.ca/2012/themes/theme2-info-eng.html

[maratd]

> "steal eyes" away from other -- less positive -- changes or events.

How is cutting waste less positive? They're conservatives. They get bonus points for cutting things. Now, if they passed tax increases, then you've got a point.

[true_religion]

There's cutting fat, then there's cutting muscle.

The two aren't too similar, but I wouldn't want anyone cutting into me who wasn't a surgeon.

Now with politics, we often have people who claim to cut waste, but are perceived as cutting necessary programs.

[redthrowaway]

Cutting spending is positive among their base, which is about a third of Canadians. The rest typically wouldn't vote Conservative. They and the NDP simply split the Liberal and Bloc vote in the last election.

You may view the CBC and Healthcare as waste; the vast majority of Canadians do not. Harper wants more than anything to convince Canadians that the Conservatives are trustworthy. The last thing he wants is for Canadians to be sick of them by the time the next election rolls around, especially if the Liberals manage to find a halfway competent leader.

That's why Harper's been as centrist as he has, and that's why cuts to popular programs are being delivered alongside this news. He'll stay true to conservative values, but only insofar as they don't hurt his re-election chances.

[gyardley]

Or Harper could just be a fairly centrist politician - after all, there's no better time in Canadian politics to push through radical change than the earliest stages of a majority government, something Harper has never previously had. If his 'true colors' were ever going to show, it'd be right now.

Not everything has to be a conspiracy theory.

[huggyface]

Cutting spending is positive among their base, which is about a third of Canadians.

Cutting spending is a positive among all Canadians. The Liberals had their most populous years when they were responsible for -- and still deserve credit for -- brutal spending cuts (health care transfers, services, etc) that balanced the budget.

While HN isn't the place for discussions like this, it really is hard to rationalize some claims against conservatives with reality. The Conservatives are currently running the largest budgets in Canadian history. They increased transfers to the provinces more than any other government (some would say naively and rashly, making promises that health care spending, for instance, could just increase exponentially forever). They cut the military budget.

But if you read what you just wrote you would think that they were a slash and burn government. Hardly.

It's also worth noting that Harper has the most liberal reign to do what he wants right now, given that he doesn't have to face an election for another four years and memories are infamously short in Canada. He doesn't need to pander to the masses right now, at all, and the same-old "trying to hide the hidden agenda" bits grow enormously tiresome, bringing the sort of ignorance, baseless partisan noise into the discussion that we see too often South of the border.

[redthrowaway]

I'll agree that HN isn't the place for this discussion. I will say, however, that if what I wrote comes across as me thinking he's "hiding his true intentions", that's not what I intended. Rather, he doesn't want to give voters, many of whom would not normally vote Conservative (and didn't when the libs had strong leaders) reason to distrust them. It's not a conspiracy; he's just playing a long game and trying to set up the Conservatives as Canada's new Natural Ruling Party (r).