The SR&ED program allows companies to claim 35% or more of eligible expenditures as either a cash refund or tax reduction. Canadian-Controlled Private Corporations (CCPCs) receive preferential treatment. For example, in Ontario, a CCPC may recover:

• 73% of qualifying labour costs

• 44% of qualifying material costs

• 44% of qualifying contractor costs

SR&ED isn’t limited to research-intensive industries. Any Canadian company facing technical challenges or uncertainties while creating or improving products, processes, methodologies, or materials may qualify.

Our experts can guide you through the SR&ED program and help prepare claims with a high likelihood of success. Contact us to learn more or visit our FAQ page for details.

MacSRED operates independently of accounting firms while collaborating with client CPAs to ensure compliance and consistency in financial reporting. Our leadership team includes contributors with prior experience preparing claims at established SR&ED consultancies and in-house R&D roles. We bring years of direct experience in SR&ED claim preparation across diverse industries, with projects ranging from software automation and process engineering to advanced materials and electronics.

Our technical analysis framework was developed in collaboration with senior practitioners, drawing on a broad portfolio of successfully accepted claims before CRA. Through our advisory network, we work with professionals who maintain active industry roles under confidentiality agreements — allowing us to integrate current best practices while respecting professional boundaries.

This collective experience enables us to deliver well-substantiated narratives and responsive support throughout every stage of the SR&ED process. We help clients implement documentation strategies that keep claim preparation efficient and audit-ready, including guidance through CRA reviews or audit requests.

We work collaboratively, ensuring clients retain ownership of their internal documentation while we focus on claim eligibility, technical substantiation, and narrative clarity.

Scientific Research & Experimental Development (SR&ED), commonly pronounced “shred,” is a Canadian federal tax incentive program administered by the Canada Revenue Agency (CRA). It encourages Canadian businesses to conduct research and development (R&D) aimed at creating new or improving existing products, processes, principles, methodologies, or materials.

SR&ED is the largest single source of federal support for industrial R&D and is available to businesses of all sizes across all sectors. Provincial programs also exist to complement the federal SR&ED incentives.

Contact us to learn more.

SR&ED-eligible work includes any effort to solve a technological challenge or uncertainty where the solution cannot be found in the public domain (e.g., Google searches, white papers). The work must be carried out systematically by qualified personnel and not as part of a training program.

Whenever you take a technical risk to advance your technology—whether to meet business requirements or improve a product or process, even for marginal improvements—you may qualify for SR&ED tax credits.

To be eligible, work must:

• Advance understanding of scientific or technological principles,
• Address scientific or technological uncertainty, and
• Involve a systematic investigation by qualified personnel.

Eligible work includes:

• Experimental development to create or improve materials, devices, products, or processes;
• Applied research conducted with a specific practical application in mind;
• Basic research carried out to expand scientific knowledge without a specific practical application;
• Support work, such as engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, or psychological research — only when it directly supports the eligible experimental development or applied/basic research.

The three main criteria for SR&ED eligibility are:

1. Technological Advancement: The experimental development must produce information that advances your understanding of the underlying technologies. In business terms, creating a new or improved material, device, product, or process must represent a technological advancement — an increase in the technology base from the start of the project.
2. Technological Uncertainty: The work must involve challenges or unknowns that cannot be solved using techniques, procedures, or knowledge generally available to competent professionals in the field.
3. Technical Content: The investigation must be systematic, moving from identifying the scientific or technological challenges, to forming hypotheses, testing through experimentation or analysis, and reaching logical conclusions. In a business setting, this means project objectives must be clearly defined early, and the methods for addressing the challenges must be clearly planned and documented.

Several types of expenditures may qualify for SR&ED, including:

• Salaries for employees directly involved in eligible SR&ED work
• Subcontractor costs for work directly related to SR&ED activities
• Materials needed to achieve technological advancements
• Overhead for office and miscellaneous expenses (typically calculated at 55% of salaries)

Federal SR&ED Investment Tax Credit: A 15% federal tax credit applies to all eligible R&D expenditures incurred in Canada. For small Canadian-controlled private corporations (CCPCs), the rate increases to 35% on expenditures up to $3 million per year, and this credit is fully refundable.

Provincial SR&ED Incentives: Additional provincial tax credits may also apply, ranging from approximately 4.5% to 37.5%, depending on the province.

Submitting an SR&ED claim with the help of external consultants typically involves:

1. Initial Assessment: Review your projects to see if they may qualify for SR&ED.

2. Project Interviews: Identify projects that meet CRA eligibility criteria.

3. Data Gathering: Collect necessary information for SR&ED reports via phone and email.

4. Technical Report Preparation: Draft a technical SR&ED report summarizing how your claim meets eligibility requirements. The draft is reviewed by your company, and revisions are made based on feedback.

5. Cost Coordination: Work with your accountant to identify project-related costs, reviewing T2 Corporate Tax Returns and financial data.

6. Form Completion: Fill out all CRA forms required for a successful SR&ED claim.

7. Submission & Monitoring: Submit the claim to the CRA and track its progress.

8. Success Fees: Consultants are only paid after the claim is accepted; if the claim is unsuccessful, no fees are charged.

Approximately 75% of SR&ED claims are accepted without further CRA inquiry. Occasionally, the CRA may request a call to clarify your report (such as through the First-Time Claimant Advisory Services). In these cases, our team will join the call to assist with communication.

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We operate on a success-based model — our fee is only due once your SR&ED credit is approved.

Typical engagements range from 15–30% of the approved credit, depending on the scale of your claim and the level of support required. All terms are agreed upon in writing before any work begins.