Scientific Research and Experimental Development (SR&ED) is a federal tax incentive returning up to 35% of eligible R&D spending. Quebec's CDAE adds more on top. Most eligible businesses never claim it.
What Qualifies?
Work must involve technological uncertainty — you don't know if the approach will work before trying. This includes novel software development, improved manufacturing processes, and new products with uncertain technical feasibility. You do NOT need a lab.
The Numbers
Federal (CCPCs): 35% refundable on first $3M of eligible R&D.
Quebec CDAE: Additional 14–30% on Quebec-based R&D.
A qualifying CCPC with $300,000 in eligible R&D can receive $105,000+ federally plus $42,000–$90,000 provincially.
Common Mistakes
- Claiming routine development as experimental — major audit risk
- Insufficient technical documentation
- Missing eligible contractor expenditures
- Filing late (must be within 18 months of fiscal year-end)
Work with an SR&ED specialist starting at the beginning of the qualifying work — documentation during the project is far stronger than reconstruction afterward.