RS&DE.

SR&ED (Scientific Research and Experimental Development) is Canada's largest federal R&D incentive, administered by the CRA and complemented provincially by Revenu Québec. It reimburses a significant portion of qualifying R&D expenditures through refundable and non-refundable tax credits. Over $4.5 billion is distributed annually to approximately 20,000 Canadian companies. Any industry can qualify — what matters is the nature of the work, not the sector.

A Canadian-controlled private corporation (CCPC) operating in Quebec can recover up to ~64% of eligible R&D spending by combining the federal SR&ED credit (up to 35% refundable for CCPCs within the expenditure limit) with the Quebec R&D tax credit administered by Revenu Québec (up to 30% refundable). The exact blended rate depends on salaries, subcontracting amounts, and the company's taxable income. Average recovery per company is approximately $200,000, but large R&D operations often exceed $1M.

SR&ED claims must be filed within 18 months of the fiscal year-end in which the expenditures were incurred. There are no extensions — missing this deadline means permanently forfeiting the credit. A company with a December 31, 2025 year-end must file by June 30, 2027. CRA typically processes complete, refundable claims within 60 days.

SR&ED is a tax credit. For CCPCs, the federal credit is partially refundable (up to 35%), meaning you receive a cash refund even if you have no tax payable — making it genuine cash-flow financing. The Quebec R&D credit is fully refundable. Non-CCPC corporations receive a non-refundable federal credit that offsets taxes owing but generates no direct payment.

Five categories qualify: (1) salaries of employees doing SR&ED work, at 100%; (2) arm's-length Canadian subcontractors, at 80%; (3) materials consumed or transformed in SR&ED, at 100%; (4) SR&ED equipment (re-eligible since December 2024); and (5) overhead under the traditional or proxy method. Market research, routine quality control, and staff training do not qualify.

Yes — software is one of the most common SR&ED sectors. Qualifying work includes resolving novel architectural challenges, developing new algorithms, overcoming performance constraints not addressable by known techniques, and building systems that push beyond publicly available knowledge. Routine coding, bug fixes, and feature additions to existing software generally do not qualify unless they involve genuine technological uncertainty.

Yes, with coordination. Federal SR&ED and Quebec R&D credits are complementary by design and are claimed simultaneously. However, the same dollar of expenditure cannot generate both SR&ED credits and a grant from another program without adjustment — grants reduce the SR&ED-eligible base. Programs like NRC-IRAP, C3I, or provincial grants must be netted against SR&ED expenditures. Hubvention models the optimal stacking for each mandate.

Hubvention handles the complete mandate: (1) 20-minute eligibility audit, (2) identification of all qualifying projects, (3) technical descriptions to CRA standard (Form T661), (4) financial calculation of federal and Quebec credits, (5) filing of T661 and RD-1029 with your T2, and (6) audit defence if CRA selects your claim for review.