A structural reform for innovation in Canada
Bill C-15 marks a significant turning point for Canada’s Scientific Research and Experimental Development (SR&ED) program. Far from being a simple technical update, this reform introduces concrete measures that enhance the program’s attractiveness and directly increase the amounts recoverable by innovative companies.
For stakeholders in the technology, industrial, and scientific sectors, these changes represent a strategic financial opportunity.
Doubling of the eligible expenditure cap
The most impactful measure concerns the increase in the cap on eligible expenditures:
- Previous cap: $3M
- New cap: $6M
This now allows companies to obtain up to $2.1M per year in refundable tax credits, at the enhanced 35% rate, for a single entity.
Practical impact
High-growth and R&D-intensive companies can now:
- Significantly increase their tax returns
- Fund more innovation projects
- Improve cash flow
Reintroduction of capital expenditures
Another major development is the return of eligible capital expenditures.
What’s changing:
- Investments in equipment, machinery, and facilities are once again eligible
- This eligibility had been removed in 2014
- It is reinstated for acquisitions made after December 16, 2024
Business implications:
- Optimization of industrial and technological projects
- Reduction in the real cost of investments
- Acceleration of production and innovation capabilities
Opening the program to Canadian public companies
For the first time, Canadian public companies can benefit from the 35% refundable tax credit.
Why this is strategic:
- Previously, only certain private companies had access
- This significantly broadens the pool of eligible beneficiaries
- Publicly listed groups can now optimize their R&D expenditures
Increase in phase-out thresholds
The thresholds for the reduction of the enhanced credit have been raised:
- Previous range: $10M to $50M in taxable capital
- New range: $15M to $75M
Implications:
- Companies retain access to the enhanced rate for longer
- Growth phases are better supported
- Reduced tax penalization during expansion
A strategic opportunity for innovative companies
These changes reposition SR&ED as one of the most competitive tax incentive programs globally.
Target sectors:
- Software and digital technologies
- Advanced manufacturing and industry
- Biotechnology and healthcare
- Cleantech and energy transition
- Fintech and innovative services
Why seek expert support?
The SR&ED program remains complex:
- Defining eligible activities
- Structuring technical documentation
- Maximizing eligible expenditures
- Ensuring compliance in case of audit
Expert support enables companies to:
- Maximize tax credits obtained
- Reduce tax risks
- Optimize their overall R&D strategy
Conclusion
With Bill C-15, Canada significantly strengthens its support for innovation. The doubling of expenditure caps, the reintroduction of capital expenditures, and the expansion to public companies create a highly favorable environment for R&D.
For businesses, failing to leverage these changes now represents a substantial missed financial opportunity.
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