Initiative overview
Canada’s Scientific Research and Experimental Development (SR&ED) program, administered by the Canada Revenue Agency, is a tax-based incentive that supports businesses conducting research and development in Canada by allowing them to claim a portion of eligible R&D costs through their corporate tax filings. Companies receive either a 35% fully refundable credit on up to CAD 6 million in annual qualifying expenditures (primarily for Canadian-controlled private corporations and, more recently, certain public firms) or a 15% partially refundable credit for other businesses. Eligible activities include experimental development, applied and basic research, and supporting work such as software engineering and AI development, provided it involves genuine technical uncertainty and systematic experimentation. Recent updates have expanded eligibility to include capital expenditures like equipment, raised thresholds so more mid-sized firms can access enhanced rates, and introduced faster, AI-assisted claim processing. In addition to the federal incentive, most provinces offer supplementary credits, allowing companies to recover a significant share of their R&D investment.
