SR&ED Tax Credit

SR&ED Tax Credit Percentages

At the Federal level, the SR&ED (or “shred”) tax credit is refundable at a rate of 35% for up to a $3,000,000 refundable limit of eligible project expenditures. This refundable limit depends on three factors. Your company must be a Canadian Controlled Private Corporation. The total net income of your company is below $800,000. Taxable capital employed in Canada is less than $50,000,000.

Each province uses their own SR&ED calculation to supplement the Federal SRED tax credit. See the table below for each province’s refund percentages.

Province Provincial SR&ED Rate Provincial SR&ED ITC Refundable Comments
Alberta
10%
Yes
The Alberta SRED tax credit is calculated from the Federal SR&ED expenditure pool
British Columbia
10%
Yes
The British Columbia SRED tax credit is calculated from the Federal SR&ED expenditure pool
Manitoba
20%
100% refundable for work performed with an approved research institute and 50% refundable for work performed in-house
The Manitoba SRED tax credit is calculated from the Federal SR&ED expenditure pool and also includes the cost of capital equipment for the use of scientific research and experimental development activities.
New Brunswick
15%
Yes
The New Brunswick SRED tax credit is calculated from the Federal SR&ED expenditure pool
Newfoundland
15%
Yes
The Newfoundland SRED tax credit is calculated from the Federal SR&ED expenditure pool
Nova Scotia
15%
Yes
The Nova Scotia SRED tax credit is calculated from the Federal SR&ED expenditure pool
Ontario
8%
Yes
The Ontario Innovation Tax Credit (OITC) mirrors the Federal SRED tax credit program and uses the Federal SR&ED expenditure pool to calculate the OITC tax credit
Prince Edward Island
0%
No
Prince Edward Island does not have an SR&ED tax credit program.
Quebec
30% – 14%. The Quebec SR&ED ITC rate starts at 30% and is reduced by 0.64% for every $1MM in total world wide assets above $50MM
Yes
The Quebec SR&ED tax credit is calculated from the sum of the eligible SRED salary base and 50% of the eligible sub-contractor expenditures incurred from scientific research or experimental development activities.
Saskatchewan
10%
Not refundable for SR&ED expenditures incurred after April 1, 2015. Refundable for SRED expenditures incurrred between March 18, 2009 – April 2015.
The Saskatchewan SRED tax credit is calculated from the Federal SR&ED expenditure pool
Yukon
15%
Yes, an additional 5% is refundable for eligible SR&ED expenditures made to the Yukon College
The Yukon SRED tax credit is calculated from the Federal SR&ED expenditure pool

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Claim your SR&ED tax credit

Looking to file a SRED tax credit claim and are not quite sure how? Our Montreal based consultants are able to guide you through the process and maximize your SR&ED tax credit claim.

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Not Sure if you are Eligible for the SRED Tax Credit?

If you are in the business of developing, producing, manufacturing or improving products or processes you likely have projects eligible for the SR&ED tax credit. Often companies believe that they need to be performing cutting edge R&D to apply for the program. This is completely false. Our government recognizes the pivotal role of companies that perform SRED activities. So much so in fact, that the success or failure of your SR&ED projects is completely irrelevant in determining whether your project qualifies for the SRED tax credit

Industries likely to Take Part in SR&ED

  • Jewelry Designers / Manufacturers
  • Life Sciences
  • Manufacturing
  • Medical Devices
  • Mining
  • Oil and Gas
  • Package Design and Development
  • Packaged Foods
  • Pharmaceuticals
  • Plastic Mold Injection
  • Print and Die
  • Pulp and Paper
  • Software Development
  • Telecommunication
  • Tool and Die
  • Transportation
  • Waste Management
  • Wineries
  • Aerospace
  • Agriculture
  • Apparel / textiles
  • Architecture
  • Automotive
  • Biotechnology
  • Brewing
  • Chemical
  • Commercial Bakeries
  • Computer Engineering
  • Electronics
  • Energy
  • Engineering
  • Fabrication (including, steel, plastics, wood, composite materials, etc.)
  • Food Processing
  • Furniture Manufacturers
  • HVAC Companies
  • IT Companies