Frequently asked questions

For Canadian-controlled private corporations (CCPCs), combined federal and provincial rates are approximately: 64% of eligible wages, 33% of eligible contractors, 40% of eligible materials, and 55% of eligible overheads. These are combined rates — the federal enhanced ITC rate is 35% on the first $6M of expenditures, with most provinces adding additional credits on top. Rates vary by company tax situation, structure, and province.

The 2025 Federal Budget introduced historic enhancements: the expenditure limit doubled from $3M to $6M, maximum refundable credits rose to $2.1M, capital expenditures were restored as eligible costs, public corporations gained access to the enhanced 35% rate, phase-out thresholds widened to $15–75M, and a new pre-claim approval process (launching April 2026) will cut processing to 90 days. These changes add an estimated $1.9B in support over six years.

The average ITC per applicant is approximately $207,000 across all business sizes. However, this varies dramatically — small businesses typically receive smaller refunds, while large enterprises can claim millions. The total program distributed $4.5 billion in fiscal year 2024–2025 across roughly 22,700 claims.

Claims are filed using CRA Tax Form T661, supplemented by Schedule 31 and provincial SR&ED schedules as needed. The filing deadline is 18 months after your fiscal year-end. Most companies work with an SR&ED consultant who prepares the technical narratives, financial summaries, and CRA forms on their behalf.

We do the heavy lifting: reviewing your R&D projects to identify eligible activities, writing defensible technical narratives, calculating eligible expenditures, preparing T661 forms and supporting schedules, filing with CRA, and providing full audit representation if your claim is selected for review. We also help build documentation processes so future claims are even stronger.

Effort depends on project scope, but we've designed our process to minimize disruption. Typically, we need 2–4 hours of interviews with your technical team per project, access to existing documentation (timesheets, tickets, design docs), and a financial review with your accounting team. We handle everything else — the narratives, calculations, forms, and filing.

Standard processing takes 2–5 weeks after filing, with refund mailing in 3–5 weeks if applicable. CRA Direct Deposit significantly accelerates timelines. If selected for audit, processing can extend to 6–9 months. The new pre-claim approval process (launching April 2026) aims to reduce this to 90 days for participating claimants.

Approximately 20% of claims face audits — that's roughly 1 in 5. Frequency depends on tax risk factors, claim size, year-over-year increases, and random CRA selection. Claims that have increased significantly in size are more likely to be audited. This is why having a consultant who can defend your claim is critical, not optional.

CRA assigns both a financial reviewer and a research & technology advisor (RTA) to your claim. The RTA will review your technical narratives and may request interviews with your R&D team. The financial reviewer examines expenditure calculations. The process typically takes 3–6 months. Having a consultant present during the audit significantly improves outcomes.

Yes — approximately 4% of claims are denied entirely, and another 6% are accepted with modifications (reductions). The most common reasons for denial are: insufficient documentation, failure to demonstrate technological uncertainty, work that doesn't meet the three-part eligibility test, and missed filing deadlines. Proper preparation and documentation are the best defense.

No. SR&ED only applies to work done in Canada. Contractors must be Canadian companies and/or individuals. There is a provision allowing up to 10% of employee time allocation for out-of-country work, but the SR&ED activity must primarily occur within Canada.

Absolutely. Startups often have the most to gain — if you're a CCPC with no taxable income, your credits are fully refundable, meaning you get cash back. Many early-stage companies use SR&ED refunds to fund ongoing development. There's no minimum company size or revenue requirement.

You need documentation showing a nexus of the activity, the performer, and time spent — correlated to the claimed SR&ED work. Typical documentation includes emails, timesheets, design specifications, work logs, tickets, meeting notes, and test results. The key is that records are contemporaneous (created as work happens) rather than reconstructed after the fact.