Canada’s Scientific Research and Experimental Development (SR&ED) tax incentive program is expanding its reach, with recent changes restoring eligibility for certain capital expenditures and opening access to more publicly traded companies, according to Bikram Johal, president and CEO of Surrey, B.C.-based Banhall Consulting.
The Canada Revenue Agency-administered program provides tax incentives to businesses conducting eligible research and development, helping them reinvest funds into further innovation.
Johal said recent years have brought increased interest from businesses outside traditional software sectors, including manufacturers developing their own software solutions rather than relying on off-the-shelf products. He identified agriculture as another industry where businesses may be undertaking eligible innovation without realizing funding is available.
Changes introduced in late 2024 restored eligibility for certain capital expenditures related to SR&ED projects, following their removal in 2013, Johal said. He also noted the federal government has increased funding for the program, which he estimated had grown from about $3 billion to between $4 billion and $4.5 billion.
Johal said the incentives can help businesses finance ongoing product development and support growth. However, navigating eligibility requirements and tax legislation can be complicated, making specialized guidance valuable for companies assessing their claims.
BanHal focuses exclusively on SR&ED consulting and employs professionals with backgrounds in engineering, biology, software development and accounting.