Tag Archives: r&d funding canada

How R&D Funding Works in Canada

According to recent research, over 58% of companies in Canada have not followed up on the research funding sred 2015opportunity to claim a part of the $3 billion in R&D funding offered by the Federal Government of Canada each year.

This missed opportunity can happen for several reasons.  Company leaders who assume that R&D funding programs are restricted to technology companies, companies performing laboratory research, or large companies with massive research budgets, are just a few reasons for overlooking these amazing opportunities to fund further innovation or improve the company’s bottom line.

Which industries are benefiting?

The fact is that most companies complete activities during the course of business that may be eligible for R&D funding, such as SR&ED. In general, if some of your staff are engaged in overcoming technological problems for which a solution is not readily available, there is a good chance that the work they are doing is fully or partially eligible for SR&ED.

Over all, the companies who receive funding span a wide range of industries including, but not limited to: manufacturing, agri-business, food manufacturing, oil and gas service companies – and of course start-ups and tech companies.

Who is Eligible for R&D funding?

Almost any Canadian company can be eligible to apply for Scientific Research and Experimental Development (SRED).  The CRA outlines three requirements your business must complete to earn SR&ED credits:

  • You attempted to overcome a technological uncertainty
  • You used systematic research and development to solve the problem
  • You aimed to advance a science or technology in the process

Furthermore:

  • Your Research & Development took place within Canada
  • You have proof of expenditures related to the claimed projects, for example T4s, and/or invoices
  • You have ownership of the Intellectual Property resulting from the project
  • You are in good standing with government financial reporting
  • Your project expenses were incurred within 18 months of the fiscal year-end as of filing

How much R&D funding is possible?

The amount of funding depends on the amount you spent of eligible projects conducted in Canada. Since salaries are a big part of the claim, entrepreneurs who do not pay themselves a salary can be diminishing the size of their claim.

Enhanced Capital Recovery can help you set up your company for success by showing you how to structure your company and document your projects to maximize success.  Outsourcing work overseas can also diminish the size of your funding opportunities, since eligible expenses must occur in Canada.

What expenses can be claimed?

A large portion of salaries of all employees and a portion of the shareholder’s salaries engaged in the projects, contractor fees as well as cost of all materials used or consumed in the course of the research work may be recoverable under one of the funding programs.

Companies may also claim cost of any prototype equipment or facilities developed for undertaking the project. The SR&ED program, for example, allows a claim of up to 65% of the salaries and expenses related to the project.

About Us

Enhanced Capital Recovery’s goal is to assist companies such as yours to truly understand all R&D funding options available, what areas in your organization may be eligible, and to assist you through the entire process.








Looking for Government R&D Funding?

There are two main Government of Canada research and development (R&D) canadian government r&d fundingfunding sources designed to help Canadian companies undertake technology innovation: Industrial Research Assistance Program (IRAP) and Scientific Research and Experimental Development (SRED).  IRAP funding is granted on a pre-approved basis to fund a project, whereas SRED is a tax credit covering up to 68% of eligible expenditures.

IRAP

For companies contemplating projects that would demonstrate technological innovation, and would like to have the project funded, IRAP may be a good option.

IRAP Eligibility criteria

To be considered for IRAP funding, the company must meet some basic criteria and consult an Industrial Technology Advisor from the National Research Council who will assess each project individually based on the strength of the company and specific aspects of the project.

Basic Criteria:

  • be a small and medium-sized enterprise in Canada, incorporated and profit-oriented;
  • have 500 or fewer full-time equivalent employees; and
  • have the objective to grow and generate profits through development and commercialization of innovative, technology-driven new or improved products, services, or processes in Canada.

Assessment of the Company and Project:

  • the business and management capabilities of the firm and the company’s potential to achieve the expected results and outcomes associated with the proposed project;
  • the financial capabilities of the firm and its plan to commercialize the developed technologies; and
  • the technical aspects of the project and its potential impact on the firm.

SRED

SRED may be a better Government R&D Funding option for companies who are already making technological breakthroughs in the course of their business activities.

SRED Eligibility criteria

The CRA outlines three requirements your business must complete to earn SR&ED credits:

  • You attempted to overcome a technological uncertainty
  • You used unfamiliar, systematic research and development to solve the problem
  • You aimed to advance a science or technology in the process

While the experiments must be conducted with a measurable goal, they can involve basic or applied research.  This could include many types of research and experimental activities, so don’t be dissuaded if you’re not conducting pure scientific research. For example, experimentation around the goal of improving an artificial flavouring for food or beverage could be eligible.

Your projects do not need to be successful to qualify for funding, as long as you can provide evidence of the attempt.

SRED Consultants

Unlike IRAP, SRED claims must be completed without the guidance of a Government consultant and often requires an in-depth understanding of the program to take maximum advantage of it.

Although the SR&ED program is an amazing financial opportunity, with over $3 Billion dollars in funds distributed yearly to businesses across all industries, complex legislation and complex report preparation have created barriers for businesses which are otherwise eligible to take advantage of it.

In fact, it is normal for businesses preparing their own SR&ED claims to experience significant difficulty in determining which expenditures are eligible. This may lead to eligible expenses going unclaimed.

Who is Enhanced Capital Recovery

Professional consultants such as those at Enhanced Capital Recovery are available to help clients capitalize on their applications and benefit most from the company they worked hard to build.

Our team has brought success to numerous organizations, including those whose claims were initially turned down by the Canadian Revenue Agency. Your company will work with SR&ED Consultants knowledgeable in the industry to recover the most funding possible.

For more information about SRED, IRAP or Province specific R&D funding opportunities, please submit a contact form and our team will arrange a free assessment of your case.