Clarity on SR&ED

The "Why and How" framework is the CRA’s current assessment standard, replacing the legacy "Five Questions." It strictly evaluates the technical impetus for your project (the 'Why') and the systematic rigor of your execution (the 'How').

The CRA simplified its language, but not the underlying legislation. Companies frequently mistake their commercial milestones for technological advancements, leading to flawed claims, severe audit risks, and rejected submissions.

Market research, routine quality assurance, UI/UX style changes, and standard commercial production are excluded by law. If an activity does not directly attempt to resolve a technological unknown, it is ineligible.

Canadian-Controlled Private Corporations (CCPCs) — and, as of 2026, eligible small-cap public corporations — can recover up to 35% of eligible R&D expenditures. With 2026 expenditure limits increased to $6 million and capital expenditures once again eligible, this represents a massive non-dilutive capital injection for scaling businesses.

It provides direct cash refunds for eligible engineering expenditures. This allows founders to finance high-risk innovation and extend their operational runway without surrendering corporate equity to venture capital.

SR&ED acts as a financial hedge. Investors deploy capital knowing that a significant percentage of high-risk technical expenditures will be systematically recovered and reinvested into the company's growth.

Contemporaneous documentation refers to raw evidence generated during the execution of the work. Retroactive documentation drafted months after project completion is heavily scrutinized and frequently rejected by the CRA.

Preserve time-stamped artifacts tied directly to technical roadblocks. Commit logs, Jira/Linear tickets, Slack threads detailing failed tests, architecture whiteboard photos, and granular timesheets are the gold standard of evidence.

Internal engineering teams lack the specialized compliance vocabulary required by the CRA. We act as technical translators, mapping your raw engineering data to strict legal definitions to maximize your return and bulletproof your claim.

Avoid firms that promise 100% success rates prior to a technical audit, those that substitute human technical analysis with automated software, or those claiming to have "insider" CRA access.

Following automated screening, claims are either accepted as filed or flagged for compliance checks. These range from a basic "Desk Review" of your financial schedules to a comprehensive "Site Visit" by a CRA technical advisor.

Treat the review as a peer-to-peer technical defense, not an audit. Lead with your senior engineers, focus exclusively on the technological roadblocks, and rely heavily on visual architecture diagrams rather than industry jargon.

The CRA provides a strict, three-tier escalation framework: an initial dispute resolution dialogue with the reviewer, an escalation to the Review Manager, and ultimately a formal Notice of Objection — filed within 90 days of assessment and, if required, carried to the Tax Court of Canada.

The TCC is the final arbiter, utilized only when internal CRA administrative appeals are exhausted. It provides an independent judicial review of your technical and financial eligibility, completely separate from the CRA's internal ecosystem.