Reviewed by Logan Hanson, BSc, CPA. Last verified against CRA guidance on August 31, 2026.
Partly, but no longer decisively. For most of the program’s history the answer was a clean binary: a Canadian-controlled private corporation earned the enhanced 35% refundable credit, and every other corporation earned 15% non-refundable. Bill C-15 broke that binary by extending the enhanced rate to a second group.
There are now three positions worth telling apart: a CCPC, an eligible Canadian public corporation, and a corporation that qualifies as neither. The first two reach the same enhanced rate. Only the third sits on 15%.
Most guidance still online was written before 2026 and teaches the old binary. A company reading it will conclude it is on the basic rate when it may not be, and the error runs in only one direction: under-claiming.
The distinction is worth money rather than being a technicality. The enhanced rate is more than double the basic one, and for a qualifying claimant it is refundable, which is the difference between a cheque and a deduction waiting for a profitable year. On a mid-sized claim that gap runs to six figures.
A Canadian-controlled private corporation is a private corporation resident in Canada that is not controlled, directly or indirectly, by non-residents or by public corporations. It is a control test, not a size test, which matters because "CCPC" is widely and wrongly described as meaning "small business".
Revenue and headcount do not decide it. The cap table does. A profitable company with substantial revenue can be a CCPC; a small startup with the wrong investor structure may not be. A single funding round that hands control to a non-resident investor can move a company out of the category in the year it closes.
Size does enter, but through a different door. Taxable capital decides how much of the enhanced rate is reachable, because the expenditure limit phases out between $15 million and $75 million of taxable capital, and the limit is shared among associated corporations.
Control can also be indirect, which is where the test catches people out. It is not decided by counting shares alone: shareholder agreements, options and voting arrangements can hand effective control to a party who holds a minority stake on paper. A company that believes it is comfortably Canadian-controlled on its cap table can fail the test on its agreements, and that is a question for an advisor rather than a spreadsheet.
Eligible Canadian public corporations, for taxation years beginning on or after December 16, 2024. In broad terms that means a corporation with a class of shares listed on a designated stock exchange, or one that elected or was designated to be a public corporation, and that is not controlled by non-residents.
This is a significant change and it is under-known. A Canadian company that listed used to lose access to the enhanced refundable rate as a direct consequence of going public. That is no longer the case, which removes a real disincentive from listing in Canada rather than abroad.
Check the effective date against your own taxation year rather than the calendar. The rule attaches to taxation years beginning on or after December 16, 2024, so a company with a June year end reaches it later than one with a December year end.
Corporations qualifying as neither of the above. The clearest and most common case is a non-resident-controlled corporation, for example a Canadian subsidiary of a foreign parent running genuine R&D in Canada.
That work is fully eligible. Whether work qualifies is a federal test set out in the CRA’s eligibility guidelines, and it does not change with corporation type at all. Only the rate and the refundability do.
The difficulty is refundability rather than the rate. A refundable credit is paid as cash even in a year with no tax owing. A non-refundable credit reduces tax owing, so in a loss year there is nothing for it to reduce and it waits until there is. Unused amounts are not lost, but "eventually" is a poor substitute for cash while a research team is being funded now.
There is one structural consolation. The basic credit carries no expenditure limit the way the enhanced rate does, so on a very large research programme 15% of an uncapped base can still be substantial. It simply arrives as a reduction in tax rather than as working capital, which suits a profitable subsidiary far better than it suits a company still spending ahead of revenue.
Outside the comparison, because a partnership is not a corporation. SR&ED performed in a partnership does not earn the partnership a credit. It flows through to the partners, who claim on their own returns, and refundability then depends on each partner’s own corporation type and province.
Older articles list partnerships alongside public and foreign-controlled corporations as a kind of non-CCPC claimant. That framing is wrong, and it causes real confusion about who files what and on which return.
The practical effect is that two partners in the same partnership, doing the same work, can end up with different outcomes: a CCPC partner may receive cash while a non-resident-controlled partner receives only a reduction in tax owing. The work does not change; the claimant does.
Take identical R&D in all three cases, and hold the spending constant so only the corporate structure changes.
At the enhanced 35% rate the federal credit is roughly $189,980. At the basic 15% rate it is roughly $81,420.
So a qualifying CCPC and an eligible Canadian public corporation each earn about $189,980, paid as cash for the CCPC even with no tax owing. A non-resident-controlled corporation earns about $81,420, and only as a reduction in tax owing. Same work, same spend, a difference of roughly $108,560 decided entirely by corporate structure.
Both figures are before provincial credits, which sit on top and vary by province.
The CCPC question still matters, but it is no longer the whole question. Two structures now reach 35% refundable, one reaches 15% non-refundable, and a partnership is not in the running because it is not a corporation. If your understanding of your own rate predates 2026, it is worth ten minutes to confirm. Book a free consultation with SRED.ca and we will tell you plainly which of the three you are in.
Status is tested for the taxation year, so a change of control during the year can move a corporation out of the category for that year. This most often follows a funding round that gives a non-resident investor control. Confirm the position before filing rather than after, because the rate applied depends on it.
Not by itself. The test is control, not the presence of foreign ownership, so a minority non-resident stake does not automatically disqualify a corporation. What matters is whether non-residents or public corporations control it, directly or indirectly, including through agreements rather than share counts alone.
Yes, subject to the same tests as any other year. A first-year corporation is often short, and the expenditure limit is pro-rated for a short taxation year, which surprises founders expecting the full amount. Confirm the pro-ration before treating the ceiling as available.
It does not. The reporting deadline is 18 months after the fiscal year end for every corporation, whatever rate it earns. A December 31, 2024 year end must be filed by June 30, 2026. The filing requirements policy sets out what a complete filing contains.
Generally yes, and unused investment tax credits are not extinguished by an amalgamation, though the rules around continuity and acquisition of control are involved. This is worth confirming with your advisor before a transaction rather than discovering the answer during one.
This article is general information, not tax advice. Tax figures depend on your corporation type, province, and taxation year.
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