What the Budget Actually Changed

The budget announces three administrative measures. An elective pre-claim approval process, increased use of artificial intelligence in program administration, and a streamlined review with fewer information requirements. The government notes these improvements "do not carry a fiscal cost."

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The reshuffled timelines are less dramatic than they look. The CRA already processes most claims within roughly 60 days, and the 180-day timeline for claims selected for review reflects what generally happens today. The one genuine speed-up, cutting expenditure-review processing from 180 days to 90 days, applies only to claims filed through the new pre-claim process.

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Here's why that saving is misleading. The budget itself says pre-claim approval happens "before businesses undertake any work or incur costs." Companies aren't saving time. They're front-loading it. The weeks spent securing technical approval before filing simply aren't counted in the new 90-day figure. The work moves earlier in the calendar. It doesn't disappear.

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The Real Story: The Enhanced AI Tool

Most of the attention has landed on pre-claim approval. In our view, the change that matters most is the budget's commitment to "increase the use of artificial intelligence in the program's administration." The government frames this as a benefit, saying AI will help the CRA "avoid subjecting low risk claims to unnecessary audit interventions."

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But there's an unstated corollary. A system trained to identify low-risk claims for fast-tracking is, by definition, also identifying higher-risk claims for scrutiny. Our expectation is that this will combine machine-learning techniques such as anomaly detection with language models capable of analyzing the technical narratives themselves.

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The practical implication is straightforward. Work that is obviously ineligible, reports padded with AI-generated slop, and duplicated or templated narratives across claims will get surfaced far more often than they are today. As more companies lean on generative AI to draft their write-ups, the CRA is positioning AI to catch exactly that pattern. The gap between a defensible claim and a flagged one is about to widen.

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How MCN Can Help

MCN has close to 20 years of experience handling SR&ED reviews, and we continually refine how we improve our clients' experience with the program. The 2026 changes make expert guidance more valuable, not less.

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We can help you evaluate whether the pre-claim review process makes sense for your situation as it benefits some businesses meaningfully and offers little to others, and knowing the difference matters. Just as importantly, we can help you prepare technical narratives that stand up to the Enhanced AI Tool: substantive, original, well-documented reports that won't get your claim flagged for the wrong reasons.

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If you'd like to understand how these changes affect your next claim, get in touch.