• Largest source of Federal funding for Canadian Industrial R&D
• Used by over 23,000 companies annually (2011)
• 75% of the companies are small to medium size
• Achieved by ~ over $3.5 billion/year in tax credits, with no cap (2011)
• Administered by CRA and the program was started in 1984

What is SR – Scientific Research? 

• Purpose – to obtain an “advancement in scientific knowledge” which encompasses Basic and Applied category under ITA 248 (1)
• This would be an advancement in the field of science itself
• “work done predominately in a laboratory”
• Work to develop a “cure for cancer”
• Accounts for less than 5% of the claims submitted

What is ED – Experimental Development?

• Experimental Development is
  • Attempt to achieve (success is not relevant)
  • Technological advancement – increasing existing Technological base
  • New or improved materials, devices, products or processes
  • Includes incremental improvements
  • Follows a systematic investigation
  • Occurs in a commercial setting
  • Includes Support work
  • Accounts for 95% of all claims submitted
  • What did you do to the technology versus with it
• Experimental Development is not
  • Trial and error testing where the success is a foregone conclusion
  • Routine engineering

Technological Advancement

• Defined as – performance of an activity to overcome an uncertainty which results in an increase in the technology base of the claimant from the beginning to the end of the project
• How did the knowledge or know-how of the claimant increase/what did he learn
• Success/failure is irrelevant
• Restrictions
  • Advancement must be in business context of claimant
• Must follow systematic approach/search by experiment