We can all imagine speeding down a winding road on a lovely summer afternoon or burning up a race track: it’s an image that appeals to all of us, not only car lovers!

Speed, control and freedom are concepts that trigger strong emotions, reminding of us of exhilarating times. This is why performance is one of the key factors in automobile technological development for many manufacturers. Years of meticulous work and close attention to detail are needed to attain the highest levels of performance provided by certain car models. Despite these developments, some thrill seekers are not satisfied with manufacturers’ suggestions and turn to high performance products available on the aftermarket. It’s not only pimply teenagers who tinker with cars in their parents’ garage!

For some, like Karim-Philip Antaki, SR&ED/Motorsport Performance Engineering Director at Lachute Performance, improving automobile performance is an actual science based on a precise engineering process. We spoke with him about this topic.

Q: Objectively (scientifically) speaking, how is the performance of a vehicle defined?

A: A vehicle’s performance is mainly measured by its physical ability to accelerate, brake and handle the road, but also by the level of comfort and pleasure at this same time. Vehicles are also qualified according to their position on the market or market segment where there are objectives to be attained compared to the competition.

Q: How can the performance of the original vehicle be improved?

A: After a technical evaluation of a vehicle’s current capabilities, we establish key performance indicators (KPI), such as gas consumption or motor efficiency in terms of pumping. A study on the capabilities and objectives is then undertaken and a technological exploration path is defined.

Q: What advantages are there to making such modifications?

A: Fuel economy thanks to increased cycle efficiency is on everyone’s lips these days. The motor’s performance at cruising or full speed will be influenced by the smoothness of transitioning power based on the motor’s improved thermal characteristics, but also on the balance of the proposed solution: power versus road handling and braking capacity.

Q: Are the solutions that you’re proposing reliable? What about safety?

A: There are no solutions without safety. Durability and reliability are criteria prioritized by our development philosophy, both on the race track and on the road. These objectives force us to find a balance when developing all of our projects.

Q: What do you think of the new hybrid and electric automobile technologies?

A: They are undeniably here. These new technologies represent an asset for automobile performance: instantaneous power and economy of non-renewable materials. In these cases, the search for performance is a real scientific and technological accelerator! We need to prepare to integrate these technologies and their capabilities on a greater scale. They provide unquestionable advantages in world competitions such as the 24 Hours of Le Mans and Formula E, which will take place in Montréal this summer, where all builders have designed a development and contribution platform.

Q: Hasn’t it all been invented? What’s in store for the future of automobile performance?

A: No! There’s no end to the quest. Hybrid and electric technologies are the best world platform for technological development, as well as the miniaturization of variable compression ratio engines and turbocompression, to produce power that meets demand while providing fuel economy. The goal will always be to increase cycle efficiency to reduce fuel consumption, even if this reduction will not always be achieved through the improvement of internal combustion engines, but rather by removing the pistons if we can manage to find a more efficient alternative.

Karim-Philip Antaki has been SR&ED/Motorsport Performance Engineering Director at Lachute Performance for more than seven years.

A recent graduate of the University of Cranfield, England, where he completed a Master of Advanced Motorsport Engineering, Karim-Philip is also a Performance Engineer for Nissan Motorsport (NISMO) and Race Engineer for the Pirelli World Challenge series in the United States.

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A good number of SME leaders in the forest industry make decisions without objective, accurate information.

To improve the performance of their businesses, it’s essential that they measure the factors affecting the main stakes.

It’s important to do a real time follow up of the key indicators of operations management, such as: the overall rate of return (availability, efficiency, quality), the equipment’s utilization rate, workers’ productivity and the unit cost of production. With this information, work methods can be quickly and efficiently adjusted.

Current technology makes it possible to acquire a substantial amount of information, at low cost, for both forestry entrepreneurs and those performing harvesting, transportation and road work. The use of GPS data, digital forms, forest inventory results and geomatics data provides appropriate accuracy for analyzing a wide range of key indicators.

While using Excel to present scorecards is obviously the most affordable method, the program has its limitations in terms of data presentation options and security. Furthermore, users must be fairly proficient to develop complex scorecards. When the databases grow and information comes from numerous sources, the use of a spreadsheet presents further risks of error and requires manipulation time.

An increasingly interesting option to consider is the use of cloud Web platforms. Data can easily be stored and secured online and the rights can be controlled from users’ accounts at different access levels. The results are available in real time on a webpage and can be consulted from any device, e.g. a computer, phone, tablet computer or even a television. Furthermore, this formula is much more flexible from a visual presentation point of view and is much less restrictive than traditional spreadsheets.

However, while this solution offers a world of benefits, it incurs monthly implementation and maintenance costs. It must therefore be determined whether it’s preferable to acquire internal resources or call upon an external service provider. The quality of the platform and the maintenance cost will be the two deciding factors.

Integrating performance management tools takes time and effort, which represents an obstacle for most forestry entrepreneurs. They have to plan for communication issues with external systems and difficulties these might have with certain existing sources of data. Then this data would have to be measured, and the results monitored, and entrepreneurs would have to react accordingly. The Université Laval’s research project on forestry transportation and harvesting entrepreneurs, PRÉfoRT, demonstrated that without coaching, most entrepreneurs neglected their performance management system due to a lack of time and internal resources.

In conclusion, monitoring performance through scorecards would be beneficial for businesses. This would enable companies to not only to keep an eye on the different factors affecting profitability or attaining goals, but also to be able to observe trends in how these indicators are changing and respond faster, as applicable. Moreover, it would also be possible to measure the impact of certain organizational changes and report financial and operational anomalies.

References:

Antoine Larochelle Benoit, F.Eng. with LBprofor

LBprofor offers professional forestry services and supports businesses in complying with requirements and improving performance. LBprofor uses scorecards to monitor the performance of its operations and also encourages its clients to integrate these tools while making sure to carefully select indicators based on defined objectives.

To contact LBprofor, call us at 819-791-4449 or send an email to [email protected]

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Tax legislation contains only a few paragraphs regarding SR&ED tax credits. Over the years, case law has completed the legislation by interpreting particular cases where the taxpayer opposed the Crown.

One of the greatest cases in the history of SR&ED is Northwest Hydraulic Consultants Limited v. The Queen, in 1997. One of the arguments bore on what did or did not constitute an eligible SR&ED project. Justice Bowman rendered a decision based on the three criteria (five-question approach) defining SR&ED activity:  scientific/technological uncertainty, scientific/technological advancement and the presence of a systematic investigation. This definition of SR&ED, subsequently reused and reconfirmed, has become a cornerstone of the program. Not all cases however have had as much impact as the Northwest Hydraulics case.

Further cases have recently enabled the tax authorities to clarify or confirm certain aspects of the scientific/technological point. We will take a brief look at one of these cases to illustrate the lessons to be learned from case law:

Joel Theatrical Rigging (JTR) Contractors (1980) Ltd. v. The Queen

Reference: http://decision.tcc-cci.gc.ca/tcc-cci/decisions/en/item/218140/index.do

In this case settled in July 2016, the company contested the CRA’s refusal of its SR&ED projects on the basis that the claims did not meet the scientific eligibility criteria.

One of the projects involved the development of a device comprising a motor that would activate a hydraulic system to control the rate of descent of a theatre’s fire curtain. Current practice in the field consisted in using counterweights to achieve the same function.

The Judge agreed with the CRA’s decision, which stated that the problems involved in attaining the objectives could be resolved by “routine engineering”; the term typically “describes techniques, procedures and data that are generally accessible to competent professionals in the field”.

When analyzing a case, the reasoning and the process used by the Judge are just as important as the ruling itself. From the arguments of this ruling, the following points should be taken into consideration when determining the eligibility of SR&ED activities:

  • It was not clear whether the project was carried out by competent professionals in the field: the employees who worked on this project did not have a technical diploma or experience in mechanical or hydraulic design. They also did not have recourse to specialized external resources. “(…) the research teams did not include any professional engineers or researchers who held a university degree in engineering, and as none of the researchers with limited engineering training were called as witnesses (…)”.
  • There was no correct formulation of hypotheses on the basis of several tests in the process. The Judge provided a number of definitions taken from various sources and retained a simple one stating that a hypothesis should be formulated as a statement to be tested: “In other words, a hypothesis is a statement to be tested by an experiment or a trial.”
  • There was a lack of thoroughness in the experimental process. For example, during trials, the rate of the curtain’s descent was not measured: “It seems to me that, if the scientific method had been used (i.e., if there had been systematic observation, measurement and experiment), Mr. Marineau and his colleagues would have determined the precise weight used in the experiments and would have precisely measured the duration of the descent in each experiment so that they could determine whether, as they moved from one experiment to the next, the duration of the descent was increasing or decreasing.”

With regard to Point 2, it could be assumed that these hypotheses could be implicit for each design iteration, but it is still possible to be able to reconstitute them from the facts and they must be specific and innovative. A good hypothesis at the basis of a trial is what mainly distinguishes a systematic investigation from a “trial and error” process.

Point 3 is an argument rarely used in case law to refute the presence of SR&ED. Note however that, in this particular case, the Judge does not set the bar very high in terms of scientific thoroughness.

Nonetheless, there is a positive aspect resulting from the comments of this ruling: the Judge reiterates that contemporaneous documentation, while beneficial, is not essential for demonstrating the existence of SR&ED: “Although Northwest Hydraulic indicated that one of the criteria of SR&ED is a detailed record of hypotheses, tests and results, some cases have suggested that this particular criterion may not be absolutely essential.”

This case constitutes another situation where SR&ED projects in applied mechanics are difficult to defend. The current practice in this field is quite vague and arguments must be convincing. Also, work must be performed by personnel at the cutting-edge of technology and a thorough development process must be adopted.

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A Budget Characterized by Prudence and Giving Priority to Services to the Population

Provincial Budget, March 28, 2017

Finance Minister, Carlos Leitão’s, fourth budget remains balanced and focuses primarily on major investments in education, health and public transit.

Tax reduction for individuals

The government announced a reduction of the tax burden on citizens, in particular by accelerating the elimination of the contribution to the health services fund in 2016 for taxpayers earning less than $134,000. Additionally, as of January 1, 2017, the increase in the first income tax bracket exempt from tax to $14,890 will generate a tax reduction benefitting all Quebec taxpayers. This adjustment will reduce the tax burden by about $295M for 2017-2018, representing slightly more than $1.4B over five years.

Health and education at the forefront

It comes as no surprise that the Quebec government announced an increase in health and education investments. In the first strategic sector, health, the government is increasing spending by 4.2% for 2017-2018, which translates into an additional increase of $742M, i.e. a $1.2B increase by 2018-2019.

In education, there will be an additional investment of $3.4B over the next five years. Since educational success is at the heart of this budget, the government is setting aside $1.5B of this amount for higher education.

Public transit

Public transit has not been ignored in this budget. In addition to investing in three major, job generating, public transit projects (the Réseau électrique métropolitain with an investment of $1.3B, extension of the metro blue line and Québec-Lévis bus rapid transit), the government plans to set aside over $800M to finance public transit for the next five years, including $475M for the Autorité régionale de transport métropolitain and a $333M additional contribution to the operating costs of public transit in every region of Québec.

Jobs and businesses

Businesses need greater means to unlock their full potential and the budget brings a breath of fresh air. Acquiring talent is crucial to support business growth. The government is allocating $289M in additional resources to implement measures aimed at workforce development. Over the next five years, supplementary resources totalling $834M will be allocated to research and innovation, including $118M for the life sciences strategy and an extra $100M for the creation of a scientific and industrial super-cluster devoted to artificial intelligence. The upcoming action plan on entrepreneurship will receive additional credits of $70M and $35M will be allocated to foster entrepreneurship among young people. Lastly, an amount of $200K per year will be invested over two years to support entrepreneurship by immigrants in the regions, a project supported by the Regroupement des jeunes chambres de commerce du Québec.

Business taxes

The government is enhancing two measures supporting business investments, resulting in tax relief of $165M over five years:

  • a three-year extension of the tax holiday eligibility period for large investment projects; and
  • the introduction of an additional capital cost allowance to support modernization and productivity.

We invite you to read the following document for more information on the tax measures announced in the 2017-2018, budget.