Every year the federal government awards approximately $4
billion to Canadian companies making Scientific Research &
Experimental Development (SR&ED) claims. The SR&ED program
is a valuable tax credit incentive for businesses advancing the
technological base within Canada. Even an incremental improvement
can qualify for the program, however the SR&ED program can also
be complicated and confusing for those new to the program. As a
result, many potential refunds and tax credits have gone unclaimed
simply due to low levels of awareness of the program, or potential
claimants being unsure of what qualifies or how to properly submit
Recent scrutiny by the Federal government has resulted in
greater public attention for the program and revisions to the
program that ultimately affects eligible expenditures and claim
amounts. These changes have immediate consequences for claimants,
but are intended to keep the program viable for the future. Despite
the potential reductions in benefit to claimants, the Canada
Revenue Agency (CRA) has demonstrated a renewed commitment to the
longevity of the program and as such, to promoting Canada as a
world-leader in scientific innovation and technological
A number of new initiatives by the CRA have been released that
provide additional program support for claimants. For example, CRA
has provided additional guidance around eligibility requirements
via online resources and pilot projects to help identify
opportunities to improve efficiencies of the program and
predictability for claimants. One key aspect that has been
reiterated for ensuring a successful claim, is the need to document
the experimental efforts and effectively describe the project
objectives and ensuing efforts. This doesn't need to be onerous
– as a matter of fact, you may already be generating the
necessary documentation as part of your existing internal
Despite the recent changes, the program remains a viable source
of funding for many small to medium sized businesses that are
actively expanding the technology base of our country. By
re-investing the benefits of the tax credit refunds in what could
be a riskier technology initiative, they are able to continue
breaking new ground in their respective industries – and that
is a good thing for us all.
Eligible activities may be integrated with your everyday
business activities – are you taking advantage of these?
Do you have processes in place to proactively identify eligible
projects at the time they are initiated so that you can maximize
the benefits available with the program?
If you're currently taking advantage of the SR&ED
program, are you receiving the full benefit that you're
entitled to and have you integrated this with your existing tax
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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