Canadian businesses investing in research, technology, and product development may qualify for tax incentives through the Scientific Research and Experimental Development (SR&ED) program.
To help eligible businesses plan their projects with greater certainty, the Canada Revenue Agency (CRA) introduced a new optional pre-claim approval process on April 1, 2026.
This process allows businesses to seek an advance determination of whether a planned project qualifies for SR&ED tax incentives.
What Is the SR&ED Program?
The SR&ED program provides tax incentives to eligible Canadian businesses conducting qualifying scientific research and experimental development.
Qualifying work may involve developing new products, improving existing processes, or addressing scientific or technological uncertainties through systematic investigation.
However, not every research, innovation, or product development activity qualifies. Eligibility depends on the nature of the work performed.
What Is New About the Pre-Claim Approval Process?
Previously, businesses generally had to undertake their projects and submit their SR&ED claims before receiving a determination of project eligibility.
Under the new optional process, eligible businesses can request approval before beginning the planned work or incurring costs.
The CRA aims to provide a determination within eight weeks of receiving a completed application.
This may be particularly valuable for smaller businesses that need greater certainty before committing significant resources to a project.
How Does the Process Work?
The general process involves four steps:
- Start a pre-claim approval request: Determine whether your business and planned project meet the application requirements.
- Submit an application: Provide information about the proposed project through CRA’s My Business Account.
- Meet with a CRA specialist: Depending on your circumstances, you may need to discuss the project with a CRA Research and Technology Advisor.
- Receive a determination: The CRA evaluates the planned work and issues its decision.
An approved project may receive pre-claim approval valid for up to three years.
However, pre-claim approval does not automatically mean every project expenditure will qualify for a tax incentive. Businesses must still maintain appropriate records and satisfy the applicable expenditure requirements.
Why Should Small Businesses Consider This?
Research and development projects often involve uncertainty, both technically and financially.
Obtaining an advance determination may help businesses:
- Make more informed investment decisions
- Plan project budgets with greater confidence
- Understand potential SR&ED eligibility earlier
- Reduce uncertainty when preparing future claims
Considering an SR&ED Claim?
If your business is planning a research or development project, reviewing the potential tax implications before starting work can be beneficial.
Seniuk & Marcato Chartered Professional Accountants can assist businesses with evaluating the accounting and tax considerations associated with research and development expenditures and coordinating appropriate tax planning.
Contact our team to discuss how your planned investments may affect your business’s tax position.
Source: Canada Revenue Agency — Scientific Research and Experimental Development (SR&ED) Pre-Claim Approval Process.
