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.
SR&ED projects can be considered eligible if they seek to reduce or eliminate technological uncertainty, and do so by a systematic investigation or search. The SR&ED program applies to any field of science or technology.

Key Attributes

 Industry Agnostic

Any field of science or technology is eligible, if the work resolves a technological uncertainty.

Competitive

Returning up to 41.5% of costs back to the claimant, the SR&ED program is a key competitive advantage.

Uncapped

No Federal budgetary cap on SR&ED credits. If you meet the program criteria, you are eligible to receive the credits.

Historical & Retroactive

Costs must be incurred, and then a claim can be submitted up to 18 months past the Fiscal Year End.

Strong Indicators of SR&ED Eligibility

  • There is no validated technology in your industry to solve a problem
  • Your company employs high-powered technical teams
  • You are creating prototype units or products for testing purposes only
  • You are attempting new technology that exceeds current industry performance standards
  • You are eligible to receive other government funding for technology development (e.g. IRAP)
  • Your work is patentable (whether you patent it or not)
  • Your technology is written up (or could be) in trade or peer-reviewed journals
  • You make technical presentations at conferences
  • Your work requires a systematic investigation to develop new techniques
  • Your oil and gas project is eligible for experimental well status

What Work is Eligible?

SR&ED eligibility is determined on a project-by-project basis by the Canada Revenue Agency (CRA) using the following Five Questions:
  • 1) Was there a Scientific or Technological Uncertainty?  A technological uncertainty occurs when there is no appropriate solution to a problem using techniques previously validated for that purpose.
  • 2) Did the project involve formulating hypotheses aimed at resolving the uncertainty?  In this case, the word “hypotheses” should be interpreted broadly to mean “unproven ideas” or “proposed solutions.”
  • 3) Was the procedure consistent with the scientific method?  SR&ED work must be conducted systematically through experiments or analyses.
  • 4) Did the project attempt to advance science or technology?  A technological advancement occurs when new or improved technology is created.
  • 5) Were records of the hypotheses, tests and progress kept? 

SR&ED exists outside the laboratory. The vast majority of successful claims are “Experimental Development,” which can occur in a commercial or industrial setting.

Failure is an option. Projects do not have to be successful to qualify. SR&ED supports the attempt at achieving technological advancement.

Re-invent the wheel. You can claim attempts to emulate a competitor’s technology if the means to do so are proprietary.