The Scientific Research and Experimental Development (SR&ED) program is a Federal Government incentive to promote R&D in Canada. It is by far the largest single industrial R&D incentive in the country, delivering over $3 billion per year in tax credits.
Most provinces have matching programs that contribute funding on top of the Federal benefits. Depending on their legal structure, Alberta organizations may be eligible for 15-41.5% returns on their qualifying R&D costs. These benefits are often delivered as cash, even if a company does not owe taxes.
Federal non-refundable Investment Tax Credits (ITCs) provide good flexibility, as they can be carried forward for up to 20 years, or back for up to 3 years.

Eligible Cost Categories

 Labour

T4 salaried employees, claimed at 100% of their SR&ED-related wages.

 Contractors

Contractors engaged for performing SR&ED-related work, such as engineering, design, analysis, etc. are claimed at 80% of their cost.

 Materials

Consumed or transformed in the process of SR&ED work. Prototypes, custom products, etc. required to validate the technology.

 Overhead

Different strategies are available for capturing SR&ED overhead costs. Let TSGI determine the method that is most advantageous for your situation.

Alberta Net SR&ED Benefit

 Canadian-Controlled Private Corporation (CCPC)

  • Privately held company
  • Not controlled by foreign ownership
  • Below $500K annual taxable income
  • Below $10MM taxable capital.

Non-CCPC (Non-Canadian Controlled Private Corporation)

  • Publicly traded company
  • Public company and/or one having foreign majority ownership or control
  • CCPCs exceeding the taxable income or taxable capital limits
    • Net SR&ED benefit will decline from CCPC rate towards the Non-CCPC rate.

CCPC

+ 41.5%

For eligible costsCombined Federal + AB Provincial benefits

31.5% Federal portion is fully refundable (cash)
10% Provincial portion is also fully refundable (cash)
Provincial cash portion capped at $400K benefit

Non-CCPC

+ 23.5%

For eligible costsCombined Federal + AB Provincial benefits

31.5% is non-refundable (applied against income taxes owed)
10% is fully refundable (cash)
Cash portion capped at $400K benefit

BC Net SR&ED Benefit

CCPC

+ 41.5%*

For eligible costsCombined Federal + BC Provincial benefits

31.5% Federal portion is fully refundable (cash)
10% Provincial portion is also fully refundable (cash)
*Provincial cash portion capped at $300K benefit

Non-CCPC

+ 23.5%**

For eligible costsCombined Federal + BC Provincial benefits

31.5% is non-refundable (applied against Federal income taxes owed)
**10% is non-refundable (applied against Provincial income taxes owed)
There is no cash benefit in BC for non-CCPCs

Saskatchewan Net SR&ED Benefit

CCPC

+ 41.5%*

For eligible costsCombined Federal + SK Provincial benefits

31.5% Federal portion is fully refundable (cash)
*10% Provincial portion is non-refundable (applied against Provincial income taxes owed)

Non-CCPC

+ 23.5%**

For eligible costsCombined Federal + SK Provincial benefits

31.5% is non-refundable (applied against Federal income taxes owed)
**10% is non-refundable (applied against Provincial income taxes owed)
There is no cash benefit in SK for non-CCPCs