Canada's largest business support program, refunding a share of eligible research and development spending through the tax system rather than an application process.
SR&ED is widely assumed to be for laboratories and new products. The Canada Revenue Agency's test is experimental development: work to resolve a technological uncertainty through systematic investigation. A manufacturer solving a production problem through trial and error, or a software team building something with no known solution, can qualify. The failure mode runs the other way too: routine development using established methods does not qualify however novel the product feels commercially.
| Type | Refundable investment tax credit for Canadian-controlled private corporations, non-refundable at a lower rate for others. |
| Rate | Canadian-controlled private corporations receive an enhanced refundable credit on eligible expenditures up to an annual limit. Confirm the current rate and expenditure limit with the CRA, as both were adjusted in a recent federal budget. |
| Eligible costs | Salaries and wages, materials consumed, and contract payments for eligible work. |
| Who qualifies | Incorporated Canadian businesses performing eligible work in Canada. Sole proprietors cannot claim through this route. |
| Provincial credits | Most provinces have their own R&D credit that stacks on top of the federal one. |
| Timeline | Nine to twenty-six weeks after filing, depending on whether the claim is reviewed. |
| Apply through | Filed with your corporate tax return, using the prescribed forms. |
Rates and the annual expenditure limit changed in a recent federal budget. Confirm current figures with the CRA.
Canadian-controlled private corporations earn a 35% refundable investment tax credit on qualifying expenditures up to an annual expenditure limit of $6 million, giving a maximum of $2.1 million refundable per year. Expenditures above the limit earn the basic 15% non-refundable credit. The limit was raised from $3 million by Budget 2025.
Applies to taxation years beginning on or after 16 December 2024. The enhanced rate phases out on taxable capital employed in Canada between $15 million and $75 million, raised from $10 million to $50 million. Certain Canadian public corporations are now eligible for the enhanced refundable rate for the first time. Capital expenditures on equipment, machinery and facilities used directly in research and development are eligible again, reversing the 2014 removal; for CCPCs earning the enhanced rate, capital-expenditure credits are refundable up to 40% of the credit amount.
Figures verified August 12, 2026 against the program's official source.
| Program | Type | Maximum | Apply through | Timeline |
|---|---|---|---|---|
| SR&ED | Tax credit, non-repayable | Tax credit | Filed with your corporate tax return | 9 to 26 weeks |
| CanExport SMEs | Grant, non-repayable | Grant | Global Affairs Canada online portal | 8 to 12 after intake closes weeks |
Program rules and eligibility: canada.ca, Canada Revenue Agency
Facts on this page last checked 7 August 2026.
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