Consultation on Scientific Research and Experimental Development
Current status: Closed
The Department of Finance has concluded a consultation on cost-neutral ways to modernize and improve the Scientific Research and Experimental Development (SR&ED) tax incentives. The consultation has helped inform the government's review of the SR&ED program, first to ensure that it is effective in encouraging R&D that benefits Canada, and second to explore opportunities to modernize and simplify it.
This engagement process gave all interested members of the public the opportunity to provide input on this topic. The consultation ran from January 31, 2024, to April 15, 2024. Thank you to everyone who participated.
Key questions for consideration
This consultation sought feedback on potential improvements to the SR&ED program.
The discussion questions that served as the basis for this consultation were the following:
- How can the SR&ED program remain effective in supporting R&D investment by businesses of all types in Canada? How can the SR&ED program better support the growth and success of R&D-intensive Canadian businesses going forward?
- What improvements to the definition of SR&ED, the program's eligibility criteria, and/or the program's overall architecture should be considered?
- How does the SR&ED program complement the existing suite of support programs for R&D in Canada? How could this complementarity be improved?
- Are there more effective ways in which the overall level of assistance provided within the SR&ED program could be targeted? If so, what changes could be made to the SR&ED program to offset the costs of any proposed enhancements?
- How can the SR&ED program effectively ensure the retention of intellectual property (IP) within Canada, particularly to support innovative Canadian businesses to remain Canadian-owned and operated?
- How can the SR&ED program be improved and streamlined to make it easier for entrepreneurs to access support?
- How can your suggested enhancements be funded by existing support available through the SR&ED program? What potential changes could best focus support to benefit Canada, including by creating economic opportunities for Canadians?
What's next?
Based on feedback received through this first phase of consultations, in Budget 2024, the government adjusted its approach from a cost-neutral reform, to provide an additional $600 million for the SR&ED program over four years, and $150 million per year ongoing, for future enhancements to the program.
Accordingly, the Department of Finance is launching a second phase of consultations to inform how additional funding allocated to the SR&ED program in Budget 2024 can be best used to enhance the program in order to boost innovation and R&D.
The Department of Finance will continue to review feedback from the first phase of consultations, alongside the analysis departmental officials are conducting, as part of the ongoing work to determine ways to modernize and improve the SR&ED tax incentives.
While the first phase of consultations has now concluded, Canadians, businesses, and stakeholders are invited to share their feedback in the second phase of SR&ED consultations until May 27, 2024.
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