Numbers
SR&ED investment tax credit rates and refund rates, federally and by province.
What is an SR&ED claim worth? Federally, up to 35% on the first $3 million in qualified expenditures for a Canadian-controlled private corporation. In Quebec, up to 30% on the first $3 million, fully refundable.
Worth noting: the federal reform of December 13, 2024 raises that limit from $3 million to $4.5 million for taxation years beginning on or after December 16, 2024.
The detailed table gives the rates province by province, with thresholds and notes.
| Eligible persons | ITC credit rate 1, 2 | Refund rate 1 | |
|---|---|---|---|
| Federal | Canadian-controlled private corporation | 35% on the first $3 million in qualified expenditures 3 | 100% |
| 15% of qualified expenditures in excess of threshold | 40% 4 | ||
| Other corporations | 15% | 0% | |
| Individuals | 15% | 40% | |
| British Columbia | Canadian-controlled private corporations | 10% 5 | 100% / 0% 5 |
| Other corporations | 10% | 0% | |
| Alberta | Corporations | 10% 6 | 100% |
| Saskatchewan | Corporations | 15% / 10% 7 | 100% / 0% 7 |
| Manitoba | Corporations | 20% 8 | 100% / 50% 8 |
| Quebec 9 | Canadian-controlled private corporations | 14% to 30% of the first $3 million in R&D salaries 10 14% of excess 10 | 100% 10 |
| Other corporations and individuals | 14% 10 | 100% 10 | |
| Ontario 9 | Corporations | 4.5% | 0% |
| Corporations – Ontario Innovation Tax Credit | 10% of the first $3 million in expenditures 11 | 100% | |
| New Brunswick | Corporations | 15% | 100% |
| Nova Scotia | Corporations | 15% | 100% |
| Newfoundland & Labrador | Corporations, individuals | 15% | 100% |
| Yukon | Corporations, individuals | 15% 12 | 100% |
Important update
On December 13, 2024, the Department of Finance proposed the following changes:
- Increase the expenditure limit on which the enhanced 35% rate can be earned from $3 million to $4.5 million. Consequently, an eligible CCPC could claim up to $1.575 million per year in the fully refundable enhanced investment tax credit.
- Increase the taxable capital phase-out thresholds used to determine the expenditure limit from $10 million and $50 million to $15 million and $75 million, respectively.
- Expand eligibility for the enhanced 35% refundable investment tax credit to eligible Canadian public corporations, up to $4.5 million per year in eligible SR&ED expenditures.
- Reinstate the eligibility of capital expenditures for both the income deduction and investment tax credit components of the SR&ED program.
These reforms will come into effect for taxation years beginning on or after December 16, 2024, unless otherwise indicated.
For more information, please refer to “Scientific Research and Experimental Development (SR&ED) Tax Incentives Program Reform and Enhancement” on Canada.ca.
Notes
- 1 — Rates shown apply to current expenditures incurred in 2015. The refund rate is in respect of unused ITCs on qualified scientific research and experimental development (SR&ED) expenditures. Capital expenditures and lease costs for equipment incurred after 2013 do not qualify as SR&ED.
- 2 — Unused federal and Ontario R&D ITCs may be carried back three years or forward 20 years. For B.C. and Saskatchewan, only non-refundable credits can be carried back three years or forward 10 years. For Manitoba, unused credits can be carried back three years or forward 10 years.
- 3 — The $3 million expenditure limit is progressively reduced and then eliminated when the previous year’s taxable income is between $500,000 and $800,000, or the previous year’s taxable capital used in Canada is between $10 million and $50 million. Thresholds are on an associated companies’ basis, and the expenditure limit must be shared among the associated group.
- 4 — 0% if the prior year’s taxable income (in aggregate for associated companies) is greater than the qualifying income limit, which is generally $500,000. The $500,000 limit is reduced where the prior year’s taxable capital exceeds $10 million, and is phased out at $50 million.
- 5 — The B.C. refundable tax credit for CCPCs is 10% of the lesser of eligible B.C. R&D expenditures and the federal $3 million expenditure limit. The credit is non-refundable beyond the $3 million limit.
- 6 — Alberta’s refundable tax credit is equal to 10% of qualified Alberta R&D expenditures up to a $4 million limit. This limit is shared with associated companies.
- 7 — For R&D expenditures incurred after March 31, 2012 and before April 1, 2015, the Saskatchewan credit is refundable only if claimed by a CCPC on up to the first $3 million of qualified expenditures annually. Otherwise the credit is non-refundable. Effective April 1, 2015 the credit rate was reduced from 15% to 10% for all corporations.
- 8 — Qualified expenditures continue to include eligible capital expenditures after 2013. Manitoba ITCs are fully refundable only for eligible Manitoba R&D activities carried out under an eligible contract with a qualifying research institute. 50% of ITCs are refundable for in-house R&D expenditures.
- 9 — Other credits are available for SR&ED work carried out by certain entities or in certain specific circumstances.
- 10 — Effective for fiscal years beginning after Dec. 2, 2014, Quebec imposes minimum expenditure thresholds in order to be eligible for the R&D tax credit. The amount of the threshold varies with the size of the corporation, in terms of assets. The Quebec rate varies from 14% to 30% for CCPCs on the first $3 million in qualified expenditures above the minimum exclusion thresholds. Otherwise, a 14% rate applies. The $3 million R&D salary limit is shared with associated companies.
- 11 — The $3 million expenditure limit for the Ontario Innovation credit is progressively reduced and then eliminated for taxable income between $500,000 and $800,000, or taxable capital in Canada between $25 million and $50 million.
- 12 — Yukon’s rate is 20% on R&D expenditures made to Yukon College.