SR&ED Is Not About Your Product!


Entrepreneur A: “Our mobile application is the first of it’s kind, and saves  people millions of dollars”
CRA: “That’s nice, but sorry, your work isn’t eligible”

Entrpreneur B: “Our system was difficult to build, there was no documentation, and it was a  black box”
CRA: “Sorry not eligible”

Entrepreneur C: “Our system works faster than our competitors in the field, and it did it in a totally new way”
CRA: “Sounds like there might be something, but sorry, not eligible”

One of the biggest misconceptions about the SR&ED program is that it is about the products you are developing. While you may be solving problems and use technology to achieve things that were previously not possible, this is actually not what the program is intended to fund. This is easily the biggest problem that entrepreneurs face when describing their work for the purposes of a SR&ED claim. The SR&ED program is actually about knowledge, not your product. In CRA parlance, what a product is capable of doing, or the actual problem solved is known as a “Technological Achievement” and is not one of the eligibility criteria. What you learned in solving the problem, and the outcomes of the various approaches/experiments undertaken is actually your “Technological Advancement”, and is one of the components of eligibility. A good SR&ED consultant will work with your team to understand what you achieved, and what actual knowledge was generated. The underlying techniques that make your product do what they do is where you need to start looking when discussing SR&ED. By looking at the approaches taken to solve the problem, and the understanding of how those experiments generated new knowledge is what needs to be presented on the technical report, and more importantly when a review occurs.

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