{"id":2192,"date":"2025-09-18T13:36:09","date_gmt":"2025-09-18T13:36:09","guid":{"rendered":"https:\/\/leyton.majjane.agency\/ca\/post\/you-build-it-we-fund-it-whats-sred-credit-eligible-in-your-business\/"},"modified":"2026-07-26T17:03:24","modified_gmt":"2026-07-26T15:03:24","slug":"you-build-it-we-fund-it-whats-sred-credit-eligible-in-your-business","status":"publish","type":"article","link":"https:\/\/leyton.com\/ca\/en\/insights\/articles\/you-build-it-we-fund-it-whats-sred-credit-eligible-in-your-business\/","title":{"rendered":"You Build It, We Fund It: What\u2019s SR&#038;ED Credit Eligible in Your Business"},"content":{"rendered":"<p>Innovation is rarely a straight line. Every experiment, trial, or unexpected setback brings you closer to a breakthrough, and in Canada, the government recognizes that. Through the <strong><a href=\"https:\/\/leyton.com\/ca\/tax-credits\/sred-scientific-research-experimental-development\/\">Scientific Research and Experimental Development (SR&amp;ED) tax credit program<\/a><\/strong>, businesses across industries can turn their research challenges into valuable funding opportunities.<\/p>\n<p>Yet many companies don\u2019t realize that what they\u2019re already building, testing, or troubleshooting might qualify.<\/p>\n<p>This article will walk you through the fundamentals of SR&amp;ED credit eligibility, highlight overlooked areas of innovation, and show you how your company can unlock its full potential.<\/p>\n<h2 class=\"wp-block-heading\">What Is SR&amp;ED and Why Does It Matter?<\/h2>\n<p>The SR&amp;ED tax credit program is Canada\u2019s largest federal incentive for research and development (R&amp;D). It provides <strong><a href=\"https:\/\/leyton.com\/ca\/tax-credits\/\">investment tax credits (ITCs)<\/a><\/strong> that directly reduce the cost of innovation.<\/p>\n<ul>\n<li>For Canadian-Controlled Private Corporations (CCPCs) under the taxable capital threshold, the program offers a <strong>35% refundable ITC<\/strong> on eligible expenditures.<\/li>\n<li>For other corporations, the federal rate is a <strong>15% non-refundable ITC<\/strong>.<\/li>\n<li>On top of this, <strong>most provinces and territories offer their own R&amp;D tax incentives<\/strong>, which can significantly increase the overall benefit.<\/li>\n<\/ul>\n<p>When combined, these credits often cover a substantial portion of <strong>salaries, subcontractor costs, and materials consumed<\/strong> in the course of <strong><a href=\"https:\/\/leyton.com\/ca\/insights\/articles\/how-to-differentiate-types-of-rd\/\">R&amp;D<\/a><\/strong>, turning risky innovation into a much more affordable investment.<\/p>\n<h2 class=\"wp-block-heading\">Understanding What Counts as SR&amp;ED credit<\/h2>\n<p>Contrary to popular belief, <strong>SR&amp;ED<\/strong> credit isn\u2019t limited to scientists in lab coats or massive corporations with billion-dollar budgets. It applies whenever you are:<\/p>\n<ul>\n<li><strong>Overcoming technological uncertainty: <\/strong>Situations where you don\u2019t know if something can be achieved or how to achieve it.<\/li>\n<li><strong>Generating new knowledge:<\/strong> Advancing scientific or technical understanding rather than relying on standard practices.<\/li>\n<li><strong>Conducting systematic investigation: <\/strong>Using structured experimentation, trials, or analysis to solve a problem.<\/li>\n<\/ul>\n<p>This means that innovation in <strong>manufacturing<\/strong>, <strong>agriculture<\/strong>, <strong>software development<\/strong>, <strong>clean technology<\/strong>, <strong>engineering<\/strong>, and even<strong> food production <\/strong>may qualify. So long as you can demonstrate the work went beyond routine application.<\/p>\n<h2 class=\"wp-block-heading\">Hidden Opportunities: Where Companies Often Miss Out<\/h2>\n<p>Many businesses don\u2019t claim <strong>SR&amp;ED tax credit<\/strong> simply because they don\u2019t recognize their projects as \u201cresearch.\u201d<\/p>\n<p>Here are some common examples:<\/p>\n<ul>\n<li><strong><a href=\"https:\/\/leyton.com\/ca\/manufacturing-invest-in-digital-transformation-through-rd\/\">Manufacturing<\/a>: <\/strong>Designing new tooling, experimenting with faster or more precise production methods, reducing defects in materials, or testing new composite blends.<\/li>\n<li><strong><a href=\"https:\/\/leyton.com\/ca\/ict-companies\/\">Software Development<\/a>: <\/strong>Developing new algorithms, enhancing system security, improving scalability, or overcoming integration barriers with existing platforms.<\/li>\n<li><strong><a href=\"https:\/\/leyton.com\/ca\/highlight-the-value-of-your-food-beverage-projects\/\">Food and Beverage<\/a>:<\/strong> Creating new formulations with longer shelf life, experimenting with plant-based alternatives, or stabilizing ingredients under different conditions.<\/li>\n<li><strong><a href=\"https:\/\/leyton.com\/ca\/sustainability-invest-in-your-clean-technology-projects\/\">Clean Tech &amp; Energy<\/a>: <\/strong>Developing more efficient fuel systems, testing emissions-reducing processes, or creating automation for extreme environments.<\/li>\n<li><strong><a href=\"https:\/\/leyton.com\/ca\/leveraging-financial-incentives-to-support-the-life-sciences-sector\/\">Medical &amp; Life Sciences<\/a>: <\/strong>Enhancing delivery methods for supplements or drugs, experimenting with medical devices, or designing clinical testing protocols.<\/li>\n<\/ul>\n<p>If you\u2019ve ever asked your team: <em>\u201cCan this actually be done?\u201d<\/em> that\u2019s the seed of <strong>SR&amp;ED eligibility<\/strong>.<\/p>\n<h2 class=\"wp-block-heading\">What You Need to Document<\/h2>\n<p>The <strong>Canadian Revenue Agency (CRA)<\/strong> doesn\u2019t just want to know the outcome; they want to see the process. That means keeping track of:<\/p>\n<ul>\n<li><strong>Objectives and hypotheses<\/strong>: What did you set out to learn or solve?<\/li>\n<li><strong>Experiments and tests<\/strong>: What iterations did you run and why?<\/li>\n<li><strong>Results and analysis<\/strong>: What did you discover, even if the outcome was failure?<\/li>\n<li><strong>Time and costs<\/strong>: Who worked on the project and what resources were consumed?<\/li>\n<\/ul>\n<p>Well-maintained documentation ensures that your claim is credible, defensible, and maximizes your refund.<\/p>\n<h2 class=\"wp-block-heading\">The Takeaway<\/h2>\n<p>If you\u2019re experimenting, improving, or creating new solutions, chances are <strong>SR&amp;ED<\/strong> can support your efforts. From manufacturing floors to software labs to test kitchens, Canadian businesses are driving innovation every day and leaving millions in unclaimed credits on the table.<\/p>\n<p>Your work doesn\u2019t have to be perfect or even commercially successful, it just must push the boundaries of what\u2019s possible.<\/p>\n<p><strong>Innovation is risky. Funding it doesn\u2019t have to be.<\/strong><\/p>\n<h2 class=\"wp-block-heading\">Why Partnering Matters<\/h2>\n<p>While the <strong><a href=\"https:\/\/leyton.com\/ca\/insights\/white-papers\/demystifying-sred-the-complete-free-guide-for-canadian-business-leaders\/\">SR&amp;ED program<\/a><\/strong> is generous, navigating it can feel overwhelming. The rules are nuanced, and each claim requires careful linking of technical work to financial costs. This is where a knowledgeable partner can make all the difference.<\/p>\n<p>At Leyton, we specialize in identifying hidden SR&amp;ED opportunities across industries. Our consultants translate your day-to-day innovation into compelling claims that stand up to CRA review.<\/p>\n<p>The result? <strong>You build it, and we help fund it<\/strong>, so you can reinvest in your next big idea.<\/p>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<div class=\"wp-block-buttons\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/leyton.com\/ca\/contact-us\/\">Connect with an expert<\/a><\/div>\n<\/div>\n<div style=\"height:30px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n<h3>Sources<\/h3>\n<ul>\n<li><a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/scientific-research-experimental-development-tax-incentive-program\/what-are-sred-tax-incentives.html\">Government of Canada &#8211; What are SR&amp;ED tax incentives<\/a><\/li>\n<li><a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/scientific-research-experimental-development-tax-incentive-program\/provincial-territorial-research-development-tax-credits.html\">Government of Canada &#8211; Provincial and territorial research and development (R&amp;D) tax credits<\/a><\/li>\n<li><a href=\"https:\/\/www.canada.ca\/en\/department-finance\/news\/2024\/12\/reforming-and-enhancing-the-scientific-research-and-experimental-development-sred-tax-incentive-program.html\">Government of Canada &#8211; Reforming and Enhancing the Scientific Research and Experimental Development (SR&amp;ED) Tax Incentive Program<\/a><\/li>\n<li><a href=\"https:\/\/www.canada.ca\/en\/revenue-agency\/services\/scientific-research-experimental-development-tax-incentive-program\/investment-tax-credit-policy.html\">Government of Canada &#8211; SR&amp;ED Investment Tax Credit Policy<\/a><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Innovation is rarely a straight line. Every experiment, trial, or unexpected setback brings you closer to a breakthrough, and in Canada, the government recognizes that. Through the Scientific Research and Experimental Development (SR&amp;ED) tax credit program, businesses across industries can turn their research challenges into valuable funding opportunities. Yet many companies don\u2019t realize that what [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":2889,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[110,111],"tags":[115,109,113,528],"expertise":[774],"class_list":["post-2192","article","type-article","status-publish","format-standard","has-post-thumbnail","hentry","category-sred","category-tax-credit","tag-sred-en","tag-sred-tax-credit","tag-sred-2","tag-tax-credit","expertise-sred-tax-credits"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v28.1 (Yoast SEO v28.1) - https:\/\/yoast.com\/product\/yoast-seo-premium-wordpress\/ -->\n<title>You Build It, We Fund It: What\u2019s SR&amp;ED Credit Eligible in Your Business - Leyton Canada<\/title>\n<meta name=\"description\" content=\"Discover hidden opportunities in SR&amp;ED tax credit for your business, what counts as SR&amp;ED, what you need to document and more..\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/leyton.com\/ca\/en\/insights\/articles\/you-build-it-we-fund-it-whats-sred-credit-eligible-in-your-business\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"You Build It, We Fund It: What\u2019s SR&amp;ED Credit Eligible in Your Business\" \/>\n<meta property=\"og:description\" content=\"Discover hidden opportunities in SR&amp;ED tax credit for your business, what counts as SR&amp;ED, what you need to document and more..\" \/>\n<meta property=\"og:url\" content=\"https:\/\/leyton.com\/ca\/en\/insights\/articles\/you-build-it-we-fund-it-whats-sred-credit-eligible-in-your-business\/\" \/>\n<meta property=\"og:site_name\" content=\"Leyton Canada\" \/>\n<meta property=\"article:modified_time\" content=\"2026-07-26T15:03:24+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/leyton.com\/wp-content\/blogs.dir\/3\/files\/2025\/09\/Canada-Website-inside-pictures-31.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"1920\" \/>\n\t<meta property=\"og:image:height\" content=\"655\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data1\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/leyton.com\\\/ca\\\/en\\\/insights\\\/articles\\\/you-build-it-we-fund-it-whats-sred-credit-eligible-in-your-business\\\/\",\"url\":\"https:\\\/\\\/leyton.com\\\/ca\\\/en\\\/insights\\\/articles\\\/you-build-it-we-fund-it-whats-sred-credit-eligible-in-your-business\\\/\",\"name\":\"You Build It, We Fund It: What\u2019s SR&ED Credit Eligible in Your Business - 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