The Scientific Research and Experimental Development (SR&ED) program is the single largest federal program supporting business research and development in Canada. In fiscal year 2024 to 2025 it delivered $4.5 billion in investment tax credits to more than 19,000 claimants.
This is SRED.ca’s plain-language, fully sourced snapshot of the program as of June 2026, including the major expansion that became law in March 2026. Every figure below is drawn from a primary Government of Canada source, and figures we could not verify against a government source were deliberately left out.
SR&ED is a federal tax incentive that reimburses Canadian businesses for part of what they spend resolving technological uncertainty, the work of building something that is not guaranteed to work and figuring out how to make it work. The support comes as an investment tax credit.
For most Canadian-controlled private corporations (CCPCs), that credit is refundable, which means the government pays it out in cash even when the company owes no tax. That cash-back feature is what makes SR&ED a genuine funding source for early-stage and pre-profit innovators, not just a tax deduction.
In fiscal year 2024 to 2025, the SR&ED program delivered $4.5 billion in investment tax credits to more than 19,000 claimants through over 22,000 claims processed. The Canada Revenue Agency describes SR&ED as the largest Government of Canada program supporting research and development in the country.
The program is growing. For the year ended March 31, 2026, the CRA reported $4.9 billion in investment tax credits claimed and $4.6 billion allowed, continuing a steady climb of roughly 50% in credit value since fiscal 2022. SR&ED is not a niche program winding down. It is a large and expanding pillar of Canadian innovation policy.
SR&ED operates on a two-tier rate structure. The enhanced 35% rate is fully refundable and applies to qualified expenditures of eligible CCPCs, and now eligible Canadian public corporations, up to an annual expenditure limit.
The basic 15% rate is generally non-refundable and applies to other corporations, to individuals, trusts and partners, and to any expenditures above the limit. Spending above the limit still earns the 15% credit.
On March 26, 2026, Bill C-15 (the Budget 2025 Implementation Act, No. 1) received Royal Assent, enacting the most significant expansion of SR&ED in years. These changes are now law, not proposals, and apply to tax years that begin after December 15, 2024.
| What changed | Before | Now |
|---|---|---|
| Enhanced-rate expenditure limit | $3 million | $6 million |
| Maximum annual refundable credit | $1.05 million | $2.1 million |
| Taxable-capital phase-out range | $10M to $50M | $15M to $75M |
| Capital expenditures | Not eligible (since 2014) | Eligible again (acquired after Dec 15, 2024) |
| Access to the 35% refundable credit | CCPCs only | CCPCs plus eligible Canadian public corporations |
The headline for innovators: the maximum refundable credit a qualifying company can collect each year effectively doubled, from $1.05 million to $2.1 million.
More mid-sized firms now qualify for the enhanced rate because the phase-out window widened, capital equipment counts again, and for the first time the 35% refundable credit reaches eligible public corporations. The policy direction is clear. Canada is putting more money behind business R&D, not less.
SR&ED has a reputation for being hard to get through. The data tells a more encouraging story. In the most recent reporting year, the CRA accepted 90% of SR&ED claims as filed, accepted a further 6% after modifications, and denied only 4%.
In other words, roughly 96% of claims result in credits, and only about one in twenty-five is fully denied. A well-prepared, well-documented claim has strong odds. The risk is overwhelmingly in the preparation, not in the program’s willingness to pay.
Effective April 1, 2026, the CRA launched a new elective pre-claim approval process. For claims that go through this process and require an expenditure review, processing time is cut in half, to 90 days from 180 days.
For companies that depend on the cash, faster certainty is a meaningful improvement.
Federal SR&ED is only part of the picture. Most provinces and territories offer their own R&D tax credits that stack on top of the federal program. The CRA maintains an official list that includes British Columbia, Manitoba, New Brunswick and others, alongside provincially administered credits in Ontario and Quebec.
A company’s true combined credit rate is therefore higher than the federal rate alone, and it varies by province.
SR&ED (Scientific Research and Experimental Development) is Canada’s federal tax incentive program that reimburses businesses for part of their spending on research and development through an investment tax credit.
For most Canadian-controlled private corporations the credit is refundable, paid out in cash even when no tax is owed. It is the single largest federal program supporting business R&D in Canada.
According to the Canada Revenue Agency, the SR&ED program delivered $4.5 billion in investment tax credits during fiscal year 2024 to 2025.
This significant investment supported more than 19,000 claimants across more than 22,000 processed claims.
There are two rates. An enhanced 35% refundable credit applies to eligible Canadian-controlled private corporations (and now eligible Canadian public corporations) up to an annual expenditure limit.
A basic 15% non-refundable credit applies to other corporations and to expenditures above the limit.
The enhanced-rate expenditure limit was raised from $3 million to $6 million by Bill C-15, which received Royal Assent on March 26, 2026 and applies to tax years beginning after December 15, 2024.
That raises the maximum annual refundable credit from $1.05 million to $2.1 million.
Roughly 96% of SR&ED claims result in credits, according to data from the most recent reporting year.
Specifically, the CRA accepted 90% of claims as filed and 6% after modifications, while only denying 4%.
The SR&ED program sets a specific reporting deadline for all applicants.
This deadline is exactly 18 months after the end of the fiscal year in which the expenditures were incurred.
This report uses a deliberately conservative standard: a figure appears here only if it was verified against a primary Government of Canada source. Where a commonly repeated SR&ED statistic could not be confirmed against such a source, it was left out rather than risk propagating an error. Primary sources include the CRA Departmental Results Report 2024 to 2025, the CRA Departmental Plan 2026 to 2027, the CRA SR&ED Annual Program Statistics, CRA SR&ED policy pages, the Department of Finance Canada Budget 2025, the 2024 Fall Economic Statement, and Bill C-15 (Budget 2025 Implementation Act, No. 1, Royal Assent March 26, 2026).
Figures are current as of June 2026. Tax policy changes, so verify the latest rates and limits with the CRA or a qualified advisor before relying on them for a filing decision. This page is informational and is not tax advice.
