The Canadian SR&ED Tax Credit Program

The Canadian federal government has many programs devoted to encouraging innovation, meaning that a lot of funding is accessible through Research and Development (R&D). One of the best of these programs is the SRED (Scientific Research and Experimental Development) Tax Credit Program.


Think that you have to have a PhD and a state-of-the-art lab to be involved in R&D and qualify for a SRED tax credit? Think again. R&D activities can be integrated with your daily business activities.


And the SRED tax credit program is a great deal. “Generally, a Canadian-controlled private corporation (CCPC) can earn an investment tax credit (ITC) of 35 percent up to the first $3 million of qualified expenditures for SR&ED carried out in Canada, and 20 percent on any excess amount. Other Canadian corporations, proprietorships, partnerships, and trusts can earn an ITC of 20 percent of qualified expenditures for SR&ED carried out in Canada” ( Canada Revenue Agency).


This is a refundable tax credit, which means that even if your business makes no profit, you will get the appropriate refund back in cash (Ward).