The federal government has introduced draft legislation (Bill C-33) to make it easier for small companies to raise venture capital (VC) without sacrificing SR&ED tax credits. Under the current rules, introduced prior to the proliferation of VC firms, companies with common investors lose access to these tax credits because two or more investors collectively have a majority interest in the shares of two or more corporations. “These association rules were creating unintended results for Canadian venture capitalists and the companies in which they invested. Many SR&ED performers receive funding from more than one venture capital firm. As a result, these performers were denied access to the refundable (investment tax credits),” Deloitte & Touche said in its most recent R&D Tax Update newsletter....