SR&ED and the law of unintended consequences
By Francis Moran
Canada’s Scientific Research and Experimental Development tax credit program is undoubtedly one of the most popular industrial incentive schemes around. Shortened to SR&ED and usually referred to as “Shred,” the program provides a 35 percent investment tax credit, topping out at just over $1-million a year, to private Canadian companies that carry out eligible R&D activities in Canada. Many other Canadian entities, including public corporations, can tap SR&ED for a 20 percent tax credit, soon to be reduced to 15 percent, and several provinces add even more with their own programs.
