SR&ED Program Overview

The SR&ED program is a Federal provider of SR&ED incentives for Canadian businesses of all sizes and in all sectors. It is the largest single source of Federal government support for industrial research and development. Thousands of companies all over the country claim their SR&ED expenditures and receive over 4 billion $ in tax credits every year. The program is designed to assist in the development of new or improved products, materials and processes. It helps stimulate sustainable growth, economic development and employment, and aims to keep companies competitive in the global economy.

The incentive is paid in the form of Federal tax credits at a rate of up to 35% of qualifying expenditures for eligible Canadian-controlled private corporations and 20% tax credits for other companies. Many provinces also offer tax credits for SR&ED activities that can go up to 37.5% of admissible expenditures.

The program is managed by the Canada Revenue Agency (CRA) and, in Quebec, by Revenue Quebec (MRQ). Companies must file a claim with each entity to obtain the corresponding tax credits.

Taking advantage of the SR&ED tax credits is part of a sound business strategy which:

  • Increases your chances of success, as well as remaining competitive.
  • Increases your return on investment in terms of time, staff and equipment.
  • Stimulates innovation and technological advancement in your industry.

Program requirements

3 fundamental criteria to meet:

  1. Scientific and/or technological uncertainties (or obstacles) that surpass the company knowledge and for which results remain unknown
  2. Scientific and/or technological advancement with a goal to develop a new product, process and/or equipment that will achieve higher performance, efficiency, etc.
  3. Scientific and/or technical content (activities, tests, results, analysis, etc.) backed up by a team that is qualified to take on SR&ED activities

Note: The information provided here is intended only as a general introduction to the program, i.e., how it works and its benefits.

For further information, Contact us.

You may also want to consult this link:
CRA Website: http://www.cra-arc.gc.ca/