The document provides information about the SR&ED program in Canada, which subsidizes eligible research and development expenditures to encourage innovation. It outlines the eligibility criteria for SR&ED projects and expenses as well as the application process and requirements. The SR&ED program could help technology companies fund their projects by providing refundable tax credits worth up to 67% of qualified research and development expenditures.

1. Maximizing Government
R&D funding
for tech companies
Debbie Frail, P.Eng., MBA
dfrail@rdpartners.com
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2. Can SR&ED help your company?
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• Does your team include creative technical people
developing new products / processes?
• Do you test ideas by building prototypes?
• Are you overcoming technical challenges to create
new or improved technology?
If you answered “yes” to any of these questions, then
the SR&ED program could help fund your project!

3. SR&ED Program
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SR&ED Program
• Encourages innovation and leadership
• Subsidizes eligible R&D expenditures
• Managed independently within CRA
Best R&D Tax Incentive Program in the World
• Canada ranked among the best worldwide
Very Accessible Program for All Companies
• Over $3.5 billion Federal funding annually
• Over 20,000 businesses each year

4. SR&ED Project Criteria
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5. Eligible SR&ED Activities
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Eligible Activities
Core R&D
• Design
• Engineering
• Research
Supporting R&D
• Identification, objective
setting
• Data collecting
• Testing
Non-Eligible Activities
Routine Technical Activities
• Routine testing
• Addition of product
features
• Quality control
Commercial Activities
• Business planning
• Market studies
• Commercialization

6. SR&ED Project Timeline
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TechnologicalUncertainties
Time
Product
Specifications
Preliminary
Studies
Market
Validation
Routine
Development
Technological
Iterations
Aesthetic
Modifications
Market
Implementation
SR&ED Project
Experimental
Development
Experimental
Testing

7. SR&ED Eligible Expenses
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Admissible SR&ED Project Expenses
• R&D employee salaries
• Subcontracted R&D (80%)
• Materials consumed or transformed
• Related overhead (proxy vs. traditional)
Non-Eligible Expenses
• Employee remuneration other than salary
• Capital expenses
• Leasing expenses

8. Example (small business)
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Eligible SR&ED Expenses:
Salaries 100 000 $
Sub-contractor fees 20 000 $
Materials consumed (testing) 10 000 $
Materials transformed (prototype) 20 000 $
Total expenses 150 000 $
SR&ED Tax Credit:
Provincial Tax Credits 21 000 $
Federal Tax Credit 80 500 $
Total Tax Credit (67%) 101 500 $

9. SR&ED Filing Timeline
Income Tax
Submission
Fiscal Year
End
CRA
Response
0 to 18 months Up to 4 months
SR&ED
Refund
1-4 months
Income Tax
Submission
Fiscal Year
End
CRA
Response
0 to 18 months Up to 4 months
SR&ED
Refund
1-4 months
Note: Assuming a CCPC and filed with original tax filing, provincial credit to follow (varies by province)
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10. Application Requirements
• Technical: Brief report per project demonstrating
concurrence with SR&ED requirements
• Financial: Cost summary per project
• Tax forms: Professionally prepared and filed
within deadlines
• Documentation: List available substantiating
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11. SR&ED Project Evaluation (CRA)
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1.Technological uncertainty that could not be
removed by standard practice?
2.Hypothesis developed to attempt to remove
uncertainty?
3.Scientific method followed?
4.Technological advancement achieved?
5.Records of hypothesis tested and results kept?

12. Document, Document, Document:
• Project outline: measurable objectives / challenges
• Timesheets
• Project Logbooks
• Monthly reports
• Test reports, analysis, conclusions
• Contracts with all sub-contracted research
organizations
• Invoices with proof of payment
• Payroll records and T-4 summaries
SR&ED Best Practices
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13. R&D Partners
Mission: R&D Partners is committed to providing
the highest level of service to meet client needs.
Team: Partners with over 25 years experience,
professional engineers and finance/tax experts.
Commitment: We strive to leverage our knowledge
base, and work hard to be an efficient and effective
member of our client’s team.
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14. Services
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15. R&D Partners
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Maximize your government
R&D funding, simplify your
life

16. Contact Us
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Tel. : 800-500-7733
Email: info@rdpartners.com
www.rdpartners.com
Debbie Frail, P.Eng., MBA dfrail@rdpartners.com