A lot of Canadian businesses never file an SR&ED claim because they assume the Canada Revenue Agency will reject it, or drag them through a costly audit. The real numbers tell a different story.
SR&ED is the single largest federal program supporting business research and development in Canada, and the approval data behind it is more encouraging than most business owners expect. Of the claims the CRA reviews, 90 percent are accepted exactly as filed. Another 6 percent are accepted after some modification, typically an adjustment to the amount claimed rather than an outright rejection. Only 4 percent are denied.
Put together, that means roughly 96 percent of SR&ED claims result in a credit of some kind. Denial is the exception, not the rule.
The 6 percent modified category is where most of the misunderstanding happens. A modification usually means the CRA agreed that eligible work took place, but adjusted the dollar amount based on the documentation provided. That is very different from a denial, and it points to the real risk in most claims: not eligibility, but how well the work is documented and described.
Strong technical narratives and clear expenditure records are what separate a claim that sails through as filed from one that gets adjusted. The underlying work does not need to change. The way it is presented and supported does.
If fear of rejection is the reason you have not filed, the data does not support it. A well-prepared claim has roughly a 96 percent chance of resulting in some credit, and a 90 percent chance of being accepted exactly as submitted. The deadline to file is 18 months after your fiscal year end, so there is more time than most businesses realize, but it is not unlimited.
For the full set of verified program statistics, including approval rates, program size, and the 2026 changes, see the State of SR&ED 2026 report.
About 96 percent of SR&ED claims result in credits. In the most recent reporting year, 90 percent were accepted as filed and 6 percent were accepted after modifications. Only 4 percent were denied outright.
Most denials come down to preparation rather than eligibility. Common issues include weak technical descriptions, thin documentation of the work performed, and expenses that were not tracked cleanly during the year.
No. The large majority of claims are accepted without a full review. The CRA’s published service standard for accepted refundable claims is 60 calendar days.
About the Author
Jude Brown is a co-founder and CEO of SRED.ca. He has helped Canadian businesses recover millions in SR&ED refundable tax credits and writes on SR&ED policy, consultant pricing, and how Canada’s R&D incentive program works in practice.
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