Tag Archives: SR&ED compared to IRAP

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.

Looking for Government R&D Funding?

There are two main Government R&D government r and d funding sred and irapfunding 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.

 

Comparing SR&ED and IRAP for Research & Innovation Funding

The Canadian federal government offers two incentive programs to businesses conducting research and innovative projects: the Scientific Research and Experimental Development (SR&ED) and the Industrial Research Assistance Program (IRAP).

The SR&ED and IRAP are two of the largest federal incentives in Canada and share a goal of encouraging economic growth through research and development projects.

The two programs have their differences, and for Canadian business owners deciding which is best for their company can be difficult. Here are the key aspects of the SR&ED and IRAP.

Governing bodies and target applicants

SR&ED—The program’s mandate is to “encourage Canadian businesses of all sizes and in all sectors to conduct research and development in Canada.”  The Canadian Revenue Agency governs the program and provides funding in the form of a tax refund or credit.

A variety of industries are included in the program’s scope, including, but not limited to: oil and gas, manufacturing, environmental technologies, food processing, agriculture, and pharmaceuticals.

IRAP—Operating as a federal grant program, the IRAP is headed by the National Research Council. It is one of Canada’s oldest funding incentives and has provided developing enterprises with grants for over 60 years.

The IRAP aims to “stimulate wealth creation for Canada through technological innovation” by investing in projects that strengthen the national technology industry. The program is open to small and medium-sized companies with fewer than 500 employees.

How and what kind of resources provided

SR&ED—Funding through the SRED is given in the form of a tax credit or refund with the amount based on each company’s tax claim.

Greater funding is given to Canadian Controlled Private Corporations (CCPC), which involves a variety of criteria but essentially requires companies to be a Canadian owned and operated private corporation.

Credits are issued for a variety of expenses, such as equipment and material costs, employee wages, and overhead spending.

IRAP—The IRAP has offered non-repayable grants up to $1 million, but generally range from $10,000 to $250,000. The application process is screened over a variety of stages, taking into consideration the company’s prospects of further development.

The program goes beyond financial assistance by providing strategic support and partnering companies with establishing industry professionals. Approved applicants are linked with Industrial Technology Advisors (ITA) for one-on-one assistance.

While there is greater guidance available under the IRAP, there are also increased expectations on behalf of the company. Applicants are usually required to submit a detailed business plan with an explanation of how the funds will be used, and there is more contact between the corporation and ITAs.

Why Work with SR&ED Consultants?

Like most government incentives, both the SR&ED and IRAP require an in-depth understanding of the programs to take advantage of available resources.

Professional consultants like ours at Enhanced Capital Recovery (ECR) are available to help clients capitalize on their applications and benefit most from the company they worked hard to build.

Our SR&ED consulting team, with offices in Vancouver, Edmonton and Toronto 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 your industry to recover the most funding possible.

For a no-obligation consultation, submit a contact form and our team will arrange a free assessment of your case.