First-Time Claimant Advisory Service (FTCAS) for SR&ED claimants


In 2014, the CRA started rolling out a new program for the first-time SR&ED claimants appropriately named the First-Time Claimant Advisory Service or FTCAS. The program is new, and there seems to be some confusion with respect to its objectives and consequences.

The confusion seems to stem from the CRA’s description of the program and the way it is being implemented. On the one hand, the CRA states that “the FTCAS is not a review or an audit and the CRA staff will not make any determination of the eligibility of work or expenditures claimed”. On the other hand, in the same document, the CRA explains that “should a refund be expected as a result of filing a claim, it will be processed after the site visit.”

After reading this, one would immediately wonder why the SR&ED refund is being processed after the site visit if during the visit the CRA staff makes no determination of the eligibility of work or expenditures claimed.

The CRA positions the program as an on-site educational session on SR&ED and describes it as a “free in-person service that provides first-time scientific research and experimental development (SR&ED) claimants with an opportunity to meet with local Canada Revenue Agency (CRA) SR&ED staff, at their place of business, to gain a better understanding of the SR&ED Program”. The outcome of the site visit is a “report outlining what was discussed during the visit and recommendations on improving future claims, if any.”

The above statement clearly emphasizes the educational nature of FTCAS, however if your company is selected for FTCAS site visit you cannot say no. FTCAS is mandatory for selected first-time SR&ED claimants.

While all this may sound confusing, after attending several FTCAS meetings with our clients, we can say that that FTCAS seems to be what the CRA says it is. It is a personalized educational session on SR&ED compliance, and its primary objective is to explicitly set CRA’s expectations with respect to the future claims.

It appears that the program is offered to the first-time claimants whose first claims have been already pre-approved. This is why the merits of the claim are not being reviewed during the FTCAS meeting. During the visit, this first SR&ED claim is being used as a reference point for explaining the SR&ED compliance requirements, identifying deficiencies and recommending solutions.
While the stated objective of FTCAS is to educate the first-time SR&ED claimants and not to determine eligibility of work and expenditures related to the filed first SR&ED claim, during the visit the CRA reviewers have an ample opportunity to do just that. We think this is one of the reasons for not processing the filed SR&ED claim before the FTCAS site visit. FTCAS offers the CRA an opportunity to “check out” the claimant, get comfortable with the company and screen out claims that are baseless or outright fraudulent.

Another reason for not processing the first SR&ED claim before FTCAS visit seems to be simply procedural. While the claim is not being officially reviewed, the CRA holds the refund as a leverage to get the FTCAS meeting sooner rather than later.

So far, our experience with the FTCAS program has been fairly positive. While being selected for FTCAS means considerable delay with processing of the first SR&ED claim, we haven’t yet seen any reductions of denials. On the other hand, the claims in question were those of our clients. These claims were prepared by us, and we don’t expect them to be reduced in the first place.

If you would like to learn more about FTCAS please contact us and we will gladly share our experience.