FAQ

The SR&ED Program provides Canadian businesses with tax credits or refunds for eligible R&D activities.
FAQs cover eligibility, qualifying work, claimable expenses, filing deadlines, and refund timelines.
Industry-specific examples include software development, biotechnology, aerospace, food and beverage,
renewable energy, and manufacturing, illustrating how various sectors benefit from innovation incentives.

Popular FAQs

Clear, client-friendly FAQs about the Scientific Research and Experimental Development (SR&ED) Program in Canada.

Canadian businesses of all sizes may qualify, including private corporations, public corporations, sole proprietors, and partnerships. The work must be done in Canada and involve solving a technological uncertainty.
Example:
A manufacturing company improving precision tooling processes.
A renewable energy startup testing new wind turbine designs.
A biotech firm experimenting with new drug formulations.

Eligible activities involve experimental development, applied research, and basic research aimed at resolving technological challenges.
Routine work or cosmetic changes do not qualify unless they directly support experimental work.
Examples:
Biotechnology: Experimenting with new enzyme formulations for industrial use.
Software & Digital Media: Developing a new app architecture to handle large-scale real-time data.
Aerospace: Designing lightweight, high-strength materials for aircraft components.
Food & Beverage: Creating a process to extend shelf life of perishable products without preservatives.
Telecommunications: Developing a more efficient signal compression algorithm.

Eligible expenses include salaries/wages, subcontractor costs, materials, and certain overheads directly tied to R&D. Capital expenditures are generally excluded.
Examples:
Allocating overhead costs like utilities for a lab conducting experimental trials.
Paying engineers developing a robotic assembly line in manufacturing.
Buying chemicals for experimental testing in a biotech lab.
Subcontracting a software team to develop new AI modules.

Claims must be filed within 18 months of the company’s fiscal year-end. Refund timelines vary, often a few months for small claims, longer for larger or reviewed claims.
Example:
A digital media firm submitting for AI research completed the previous year.
A mechanical engineering company files a claim in 2026 for prototype testing done in 2025