Telos Business SolutionsScientific Research & Experimental Development Consultants
SR&ED EXplained
Canada’s Scientific Research and Experimental Development (SR&ED) tax credit program provides generous incentives for companies that conduct research and development. SR&ED helps innovative companies move a product or process from its current stage, forward.
The SR&ED program provides the financial security necessary to explore and experiment when there is some uncertainty of the outcome. Essentially, it’s a license to experiment and test new hypotheses and processes while offsetting some of the financial risk. Administered by the Canada Revenue Agency and supplemented by the Ontario Innovation Tax Credit, SR&ED is unquestionably the best government program available to support R&D in Canada.
It rewards risk takers who step outside the day-to-day business of their company to make something new, or make something better. The program is not rooted in success or failure, but in the pursuit of new knowledge, regardless of the outcome.
After all, knowing how not to do something can be equally as important in R&D.
What Qualifies as Scientific Research and Experimental Development?
It’s common to associate scientific research with images of lab coats and test tubes. While lab research is a large and critical component of SR&ED, research and testing that occurs on the shop floor is just as eligible for this program. To qualify for the SR&ED program, a project must include three essential criteria:
- It must strive for scientific or technological advancement. Whether the end result was successful or not is irrelevant, as long as knowledge was gained in the process.
- It must include some degree of scientific or technological uncertainty.
- It must be scientific and/or technical in nature.
