The Canadian SR&ED (SC….) Program in Canada was setup to engange in research and development in Canada.

  • Largest source of Federal funding for Canadian Industrial R&D
  • Used by over 23,000 companies annually (2011)
  • 75% of the companies are small to medium size
  • Achieved by ~ over $3.5 billion/year in tax credits, with no cap (2011)
  • Administered by CRA and the program was started in 1984

What is SR – Scientific Research? 

  • Purpose – to obtain an “advancement in scientific knowledge” which encompasses Basic and Applied category under ITA 248 (1)
  • This would be an advancement in the field of science itself
  • “work done predominately in a laboratory”
  • Work to develop a “cure for cancer”
  • Accounts for less than 5% of the claims submitted
Modern business workplace

What is ED – Experimental Development?

  • Experimental Development is
    • Attempt to achieve (success is not relevant)
    • Technological advancement – increasing existing Technological base
    • New or improved materials, devices, products or processes
    • Includes incremental improvements
    • Follows a systematic investigation
    • Occurs in a commercial setting
    • Includes Support work
    • Accounts for 95% of all claims submitted
    • What did you do to the technology versus with it
  • Experimental Development is not
    • Trial and error testing where the success is a foregone conclusion
    • Routine engineering

Technological Advancement

  • Defined as – performance of an activity to overcome an uncertainty which results in an increase in the technology base of the claimant from the beginning to the end of the project
  • How did the knowledge or know-how of the claimant increase/what did he learn
  • Success/failure is irrelevant
  • Restrictions
    • Advancement must be in business context of claimant
  • Must follow systematic approach/search by experiment