5 December 1994 Ministerial Letter 942198A - XXXXXXXXXX

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the CRA.
Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle de l'ARC.

Please note that the following document, although believed to be correct at the time of issue, may not represent the current position of the Department.

Prenez note que ce document, bien qu'exact au moment émis, peut ne pas représenter la position actuelle du ministère.

XXXXXXXXXX 5-942198

Attention: XXXXXXXXXX

December 5, 1994

Dear Sirs:

Re: XXXXXXXXXX
Request for approved research institute

This is in reply to your letter of August 25, 1994 requesting that XXXXXXXXXX (the "Center") be approved as a research institute for purposes of clause 37(1)(a)(ii)(B) of the Income Tax Act (The "Act"). We apologize for the delay in responding.

Based upon the information provided, we understand the

XXXXXXXXXX

XXXXXXXXXX

In order for the Center to become an "approved research institute", it must meet the criteria of a non-profit organization and be able to demonstrate that it is able to carry out SR&ED on an ongoing basis. More specifically, all the following requirements must be met:

(a)the Center must have the facilities and personnel capable of carrying out SR&ED as defined in the Act;

(b)the Center must carry on only activities that are unquestionably SR&ED;

(c)the Center must be a distinct entity which must satisfy the requirements for non-profit status;

(d)the general public must be a beneficiary of the results of any successful research; and

(e)the funding of the Center must be sufficient to ensure ongoing SR&ED.

In order to determine if these criteria are satisfied, we would require the following additional information relating to the Center and its activities:

(i)the identification of the legislation under which the Center was created in XXXXXXXXXX;

(ii)copies of the Center's charter or trust agreement which should indicate that the Center is a non-profit organization, as well as how its property will be distributed in the event of a wind-up;

(iii)a detailed description of the Center's arrangements for obtaining and disbursing funds, as well as a confirmation that no part of the Center's income is available for the personal benefit of any of its member except the payment in good faith of reasonable renumeration in return for any services rendered to the Center;

(iv)financial statements;

(v) information concerning the ownership of results of research;

(vi)a confirmation that all projects undertaken by the Center will not include activities described in paragraphs 2900(1)(d) to (j) of the Income Tax Regulations, which are activities with respect to

(d)market research or sales promotion;

(e)quality control or routine testing of materials, devices or products;

(f)research in the social sciences or the humanities;

(g)prospecting, exploring or drilling for or producing minerals, petroleum or natural gas;

(h)the commercial production of a new or improved material, device or product or the commercial use of a new or improved process;

(i)style changes; or

(j)routine data collection;

(vii)a list of researchers' names and qualifications;

(viii)a list of equipments that will be used by the Center; and

(ix)a copy of the agreement to be concluded between the XXXXXXXXXX and the Center for the utilisation of the XXXXXXXXXX space.

Should you need further information, please contact Johanne Desparois at (613) 957-8953.

Yours truly,

for Acting Director
Manufacturing Industries,
Partnerships and Trusts Division
Rulings Directorate
Policy and Legislative Branch