This has been developed in many countries, this innovation box. Among the most recent is the U.K. They went to a very generous program. That prompted other countries in the EU and the OECD to study this idea. The OECD has actually come up with guidelines on this type of tax incentive. I say “guidelines”, but I don't know how much they can enforce them. They probably can't enforce them. I think the EU has agreed to them.
In the guidelines, you need to tie the income, for example, to R and D activity that has taken place in the country. There's a formula whereby the company that is claiming this tax credit has to show that it actually spent its own money on R and D to some extent. It doesn't need to have done all the R and D itself—it may have outsourced some of it—but a formula on that will affect the patent credit.
One thing I don't think we mentioned in our paper is that Quebec has also launched a program that's starting in January. Their criteria are that it has to have a patent, the R and D must have been done in Quebec, there has to have been some tax credits for R and D, and the manufacturing has to be done in Quebec as well. The idea is that it's not just getting IP but it's getting IP and also your manufacturing.
In our case, we're proposing that it be in Canada. For manufacturers, the incentive is therefore to do R and D and then, if you commercialize it, there will be a reward at the end, an incentive to do so, but you should be manufacturing and doing your R and D here in Canada to some extent.
There are probably different formulas to look at—how much of the manufacturing, how much of the R and D, whether you can outsource some of it, whether it can be done in other countries, and so on—to arrive at a number.