Canada’s Scientific Research & Experimental Development (SR&ED) program has been waiting for two years for the enactment of a significantly more generous policy. With higher expenditure limits, restored eligibility for capital costs, and a push for simpler administration, the rules are shifting in favour of innovative companies. These policy changes are currently in draft legislation that seems likely to be enacted.
A well-designed SR&ED strategy can now deliver more cash, more predictability, and broader eligibility than it could just a short time ago.
Many businesses underestimate how much of their day-to-day technical work qualifies. If you’re building prototypes, refining algorithms, improving production processes, experimenting with new materials, or tackling problems where the outcome isn’t obvious, have failed tests, debugging or alternative design attempts, you may already be doing SR&ED. If this sounds familiar, you could be leaving meaningful cash refunds on the table.
What’s Changed?
1. Larger 35% Refundable Credit
Budget 2025 doubles the enhanced expenditure limit for CCPCs from $3 million to $6 million, increasing the maximum refundable credit to $2.1 million (35% of $6 million). The taxable-capital phase-out is also increased from $10-50 million to $15–75 million, allowing more growing companies to access the higher refundable rate.
2. Capital Expenditures Return
As of December 15, 2024, SR&ED once again covers capital property and related lease costs. This is a major benefit for manufacturers, cleantech developers, and hardware-intensive innovators planning new equipment or facility investments.
3. Simpler, Faster Administration
Budget 2025 signals a move toward streamlined forms, clearer guidance, and a faster, more predictable claims process. This should reduce compliance costs and improve certainty in budgeting SR&ED cash flows.
SR&ED now means more money, to more types of businesses, on more expenditures.
How Andersen Helps
SR&ED looks simple on paper, but the value you receive depends on framing projects correctly, documenting uncertainties, and navigating CRA expectations. Andersen’s SR&ED team brings:
- Deep tax, technical, and scientific expertise across software, manufacturing, energy, cleantech, life sciences, and more
- Practical experience positioning claims in line with CRA’s evolving criteria
- Integrated modelling of SR&ED alongside other incentives (Clean Tech ITCs, provincial credits, etc.)
- Multi-year planning to align R&D, capex, and growth strategies
We help you identify eligible work, strengthen documentation, withstand CRA review, and optimize the tax value across your broader innovation plans.
Thinking About SR&ED?
It’s the right time to revisit SR&ED if you’re:
- Scaling R&D and approaching or surpassing the old $3M limit
- Investing in new R&D equipment or facilities
- Frustrated by past SR&ED administrative complexity
If you’d like to understand the new SR&ED landscape and what it means in real dollars for your business, Andersen’s SR&ED team would be pleased to speak with you.
To discuss your specific situation contact Elan Harper and David Roe.
