What is SR&ED?
SR&ED is short for Scientific Research & Experimental Development and is a tax incentive program administered by the Canadian Revenue Agency (CRA).
The SR&ED program is designed to encourage R&D and create new jobs in Canada.
How do companies benefit from SR&ED?
Cash refunds of up to 64% of salary expenses can be received by Canadian private companies in B.C. doing innovative, experimental or R&D work carried out in Canada.
Refund on Salaried Employees
Refund on Contractors
Without SR&ED:
$150,000 R&D Budget =
Employees
No SR&ED claim filed
$0 Cash Refund
With SR&ED:
Employees
Successful SR&ED claim filed
$96,000 Cash Refund =That's almost enough funding to hire 2 more employees!
Contractors
Successful SR&ED claim filed
$50,000 Cash Refund =That's enough funding to hire 1 more contractor.
The SR&ED program was set up by the federal government to encourage and reward the growth of innovative companies.
Why? Because innovative companies are more competitive and creating new jobs helps build a stronger economy for Canada.22,000 Canadian companies receive
year after year.
75% of those are small companies.
If you qualify, you receive the benefits, even if your company is not profitable yet.
If your company is innovating, you should be applying for SR&ED.
Are there deadlines?
Yes, and acting sooner is always better.
- "We are just starting!" Our tax year-end is in the future
- "We are ready to go!" We're close to or just past our tax year-end
- "Is it too late?" We started R&D work a while ago
What do I do?
– start tracking the time
spent on R&D
– create or collect records of
your R&D work
– get ready to file
When do I file?
Within 6 months, but
no later than 18 months
after your tax year-end
When do I get my benefits?
2 weeks to 4 months
after your claim is filed
What do I do?
– track and summarize time
spent on R&D
– create or collect records of
your R&D work
– file your claim or
get ready to file
When do I file?
Within 6 months, but
no later than 18 months
after your tax year end
When do I get my benefits?
2 weeks to 4 months
after your claim is filed
What do I do?
– list and summarize time
spent on R&D
– collect available records of
your R&D work
– file your claim
When do I file?
You MUST file within 18 months
of your tax year end
When do I get my benefits?
Up to 8 months
after your claim is filed
You apply for SR&ED after the end of the tax year in which you did any R&D work.
You can apply even if your R&D project is not finished, or your project failed.
You can apply each and every year, if you did R&D work and had qualifying expenses in that year.
The SR&ED program has existed since 1986, however, the Canadian government has funded research activities as far back as 1944.
What is “R&D” work?
Identifying what work is R&D and presenting this information to CRA is one of the more challenging aspects of applying for SR&ED.
CRA looks for your answers to 3 key questions:
1 What technological uncertainty were you trying to overcome, and why was it uncertain?
2 What work did you do to overcome this uncertainty, and how did you do this work?
3 What technological advancement did you achieve or try to achieve, and why is it an advancement?
It is important to get this right.
There can be several layers of activity within a business:

Research Returns consultants understand CRA’s rules and terminology.
We know how to prepare SR&ED applications in the manner that CRA expects.