New SR&ED Changes Boost Canadian Hard Tech and Manufacturing Startups
Canada's Budget 2025 introduces significant enhancements to the Scientific Research and Experimental Development (SR&ED) program, aiming to supercharge hard tech and manufacturing startups. Historically associated with software sectors, the program now better supports companies with physical R&D footprints, such as cleantech, robotics, and deep materials firms. Key changes include doubling the enhanced refundable credit limit from $3 million to $6 million, reinstating eligibility for capital expenditures like equipment and facilities, and allowing publicly traded companies to access top benefits. These adjustments address the high costs of hardware innovation, enabling firms to reclaim investments in materials and production trials. Paul Davenport from Boast, an R&D tax credit platform, describes this as a virtuous cycle that encourages risk-taking and deeper investigation. The reforms are designed to help Canadian companies rebuild supply chains and enhance global competitiveness by providing non-dilutive capital. With over $4.5 billion returned to businesses in 2025, the updated SR&ED framework offers a generous opportunity for mid-sized and larger players to offset experimentation costs, fostering an environment where technological hypotheses can be tested without excessive financial aversion.
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New SR&ED Changes Boost Canadian Hard Tech and Manufacturing Startups
Canada's Budget 2025 introduces significant enhancements to the Scientific Research and Experimental Development (SR&ED) program, aiming to supercharge hard tech and manufacturing startups. Historically associated with software sectors, the program now better supports companies with physical R&D footprints, such as cleantech, robotics, and deep materials firms. Key changes include doubling the enhanced refundable credit limit from $3 million to $6 million, reinstating eligibility for capital expenditures like equipment and facilities, and allowing publicly traded companies to access top benefits. These adjustments address the high costs of hardware innovation, enabling firms to reclaim investments in materials and production trials. Paul Davenport from Boast, an R&D tax credit platform, describes this as a virtuous cycle that encourages risk-taking and deeper investigation. The reforms are designed to help Canadian companies rebuild supply chains and enhance global competitiveness by providing non-dilutive capital. With over $4.5 billion returned to businesses in 2025, the updated SR&ED framework offers a generous opportunity for mid-sized and larger players to offset experimentation costs, fostering an environment where technological hypotheses can be tested without excessive financial aversion.
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