Reviewed by Logan Hanson, BSc, CPA. Last verified against CRA guidance on July 29, 2026.
Yes, for the building science, not the building itself. Construction firms routinely assume their work cannot qualify because it is not software or lab research. But when a project pushes building envelope or mechanical system performance well beyond standard code, and the team has to experiment to get there, that experimentation is exactly the kind of work SR&ED supports.
The gap isn’t between companies that innovate and those that don’t. It’s between companies that recognize their innovation and those that don’t. A lot of genuine building science never gets claimed simply because nobody framed it as R&D.
The eligible work is the technical investigation, not the assembly. It has to show technological uncertainty, systematic investigation, and technological advancement, the same three tests every SR&ED project meets. In construction, that usually looks like:
You can see the CRA’s eligibility framing on the SR&ED program pages.
Standard construction, carried out with established methods and a predictable result, does not qualify. Building to code with known assemblies is routine work, no matter how skilled. The claim lives only in the parts where the outcome was genuinely uncertain and you had to investigate. Keeping that line clear is what makes a construction claim defensible.
A passive-house construction company with 25 employees had been pushing building envelope and mechanical system performance well beyond standard code, but had never framed the work as R&D and was not sure construction could even qualify. The eligible work was not the construction itself. It was the building science: unresolved questions in thermal bridging, airtightness, and mechanical performance in extreme climate conditions that required real experimentation to solve.
We separated the standard building work from the genuine technical investigation, documenting the engineering trials, thermal modelling, and performance testing that qualified. The claim covered the science and left the general construction activity out. That is exactly why it held up when the company was audited, and the $105,000 claim was approved at 100%. This is one of eleven engagements in our full SR&ED case studies document.
Take a Canadian-controlled private corporation (CCPC) whose building-science work supports $240,000 in eligible salaries, $40,000 to an arm’s-length Canadian engineering contractor, and $28,000 in materials consumed building and testing trial assemblies. The contractor counts at 80%, adding $32,000, for a qualifying base near $300,000. At the enhanced 35% refundable rate, that is roughly $105,000 in federal credit, before the prescribed-proxy overhead amount and provincial credits, which usually push the total higher.
For a CCPC, that credit is refundable, paid as cash even if no tax is owed, up to the enhanced ceiling on the first $6 million of qualifying expenditures, for up to $2.1 million per year. That ceiling phases out as taxable capital grows and is shared among associated corporations, so treat it as a maximum, not a default. Note that only the experimental portion is in the base. The routine build stays out.
If your projects push past standard code, work through this before assuming you cannot claim.
Construction claims live or die on the separation between science and build, which is a technical judgment, not a bookkeeping one. SRED.ca works technical-first and charges a flat fee billed monthly, published openly and roughly half the lifetime cost of percentage-based firms. We are the only SR&ED provider we are aware of that publishes its pricing.
The work is backed by a 75% approval guarantee: if the CRA approves less than 75% of the filed claim, we waive our fees. If there is no eligible work in your year, you don’t pay. For more on getting a claim right, see our guides on maximizing refundable SR&ED claims and why companies miss refunds.
If your projects go beyond standard code and require genuine experimentation to hit their performance targets, the building science inside them may well qualify for SR&ED, even if the build itself does not. A free consultation usually tells you within an hour whether there is a claim worth making. For the bigger picture, see our State of SR&ED hub.
Yes, for the building science, not the building itself. Experimental work on the building envelope, mechanical systems, or materials that pushes beyond standard code and requires genuine testing can qualify.
Work that resolves genuine technological uncertainty, such as thermal bridging, airtightness, or mechanical system performance in extreme climate conditions, worked out through systematic testing and modelling rather than standard practice.
Standard construction carried out with established methods and predictable results does not qualify. The routine build is excluded, and only the genuine technical investigation within it is claimable.
Yes. A defensible claim isolates the experimentation, engineering trials, and performance testing from the standard building activity. That separation is exactly why well-scoped construction claims hold up under audit.
Yes. One passive-house builder’s $105,000 claim, built entirely on envelope and mechanical-system experimentation, was approved at 100% when the company was audited.
We separate the building science from the standard build, document the trials, thermal modelling, and performance testing, and work on a published flat fee with audit defence included.
This article is general information, not tax advice. Tax figures depend on your corporation type, province, and taxation year.
Do you have a SRED question? Planning for the future or perhaps you want to know how much your claim might be? Don’t worry, our CPA is always ready to answer any question. Get a SRED expert in your corner.
Have a question? We’d love to help. If you don’t have a SR&ED expert in your corner, doesn’t it make sense to have one?
