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Scientific Research and Experimental Development (SR&ED)

SR&ED is the largest federal tax incentive program in Canada aimed at encouraging companies to perform research and development (R&D). It supports over 20,000 claimants each year by offering more than $3 billion in tax credits to businesses advancing innovative projects.

Beyond the federal program, many provinces and territories also offer complementary SR&ED programs with additional funding opportunities. These regional programs have separate eligibility requirements, reimbursement rates, eligible expenses, and application timelines that can further enhance total support for R&D work.

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Funding Amount

Funding levels vary by expense type:

  • Labour: Up to 69% of eligible salaries (includes overhead)
  • Contractor: Up to 36% of contract costs
  • Materials: Up to 45% of consumed materials
    Provinces and territories may add between 3.5% and 30% in additional support.

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Eligible Applicants

SR&ED is available to many business types in Canada, including:

  • Canadian-Controlled Private Corporations (CCPCs): Eligible for a refundable credit of 35% on up to $3M in qualified expenses. Additional expenses receive a 15% non-refundable credit.
  • Other Corporations, Individuals, and Trusts: Can access a 15% non-refundable credit.
  • Partnerships: The tax credit is split among eligible partners (corporations, individuals, or trusts).

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Eligible Activities

Projects must involve experimental development or scientific research that deals with uncertainty and seeks solutions not publicly available.

Labour:

  • Based on time spent on eligible R&D in Canada
  • Minimal claim allowance for work done outside Canada

Contractors:

  • Must be Canadian contractors performing R&D in Canada
  • Portion of contracts must be directly tied to eligible work

Materials:

  • Includes items consumed, scrapped, or transformed (e.g. prototypes)
  • Can be sourced from Canadian or international suppliers

Overhead:

  • Proxy method: 55% of adjusted labour costs
  • Traditional method: Based on actual costs tied directly to SR&ED activities

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Deadline to Apply

Book a meeting to speak to our grants team for the latest information regarding the next application intake period or subscribe to our newsletter to stay up to date.

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