News

Canada is entering a pivotal year for innovation funding. Significant federal enhancements to SR&ED and Québec’s introduction of the CRIC credit will expand access, modernize eligibility, and increase support for companies investing in scientific research and experimental development.  

Below, FI Group by EPSA outlines the key updates at both the federal and Québec levels, and what they mean for your funding strategy. 

Federal Update: SR&ED’s Most Significant Evolution in a Decade 

The Scientific Research and Experimental Development (SR&ED) program offers federal incentives for businesses engaged in research and development. It provides a deduction as well as a refundable or non-refundable investment tax credits depending on corporate structure and size. SR&ED eligibility is determined through two primary tests: 

• Whether the work seeks technological advancement (the Why?) 
• Whether it uses a systematic investigation or search (the How?) 

In 2026, Canada’s Scientific Research and Experimental Development (SR&ED) program is undergoing its most significant evolution in over a decade. For innovative businesses, this is a massive injection of capital.  

 

1. The $6 Million Threshold

The biggest headline for 2026 is the expansion of the enhanced 35% refundable tax credit. 

• Doubled Expenditure Limit: The expenditure limit for Canadian-Controlled Private Corporations (CCPCs) has doubled from $3 million to $6 million. 
• Eligibility Extended to Public Corporations: eligible Canadian public corporations can now access the enhanced 35% refundable rate, not just CCPCs. 
• Wider Net: The taxable capital phase-out thresholds have also been raised. Companies can now maintain full access to the 35% rate with up to $15 million in taxable capital (previously $10 million) phasing out entirely only at $75 million (previously 50 million). 

These changes mean that qualifying companies can now receive up to $2.1 million in annual cash refunds, a significant jump from the previous maximum of roughly $1 million. 

2. The Return of Capital Expenditures 

For the first time since 2014, SR&ED is moving beyond salaries and materials cost. You can once again claim  machinery and equipment  used for R&D (acquired after December 16, 2024). 

This is a major boost for sectors where innovation depends on hardware and infrastructure: advanced manufacturing, robotics, cleantech, biotech, and any field that relies on specialized lab equipment, experimental rigs, or highperformance computing. By broadening the cost base beyond salaries and consumables, the SR&ED program better reflects the full cost of experimentation and technological advancement in 2026. 

 

Québec Update: A New Chapter with the CRIC 

While SR&ED modernization expands federal support, Québec is simultaneously reshaping its provincial incentives with the Tax Credit for Research, Innovation and Commercialization (CRIC), a consolidated and more flexible framework intended to support the full innovation lifecycle, from early research through pre‑commercialization and market readiness.

1. A Transition to a Simplified Framework

For Québec businesses, the CRIC replaces the existing R&D related tax credits and is available to corporations that carry out SR&ED or precommercialization activities in a taxation year beginning after March 25, 2025. The legacy programs are still available for taxation years beginning before March 26, 2025. 

2. A Two-Tier Refundable Credit 

The CRIC provides a refundable tax credit at a rate of: 

• 30% credit on the first $1 million of qualified expenditures exceeding the exclusion threshold 
• 20% on the excess of qualified expenditures over the $1 million maximum. 

To benefit from the CRIC, a corporation must have incurred qualified expenditures in excess of a certain threshold in the tax year, namely the greater of the following two amounts: 

• $50,000; 
• The sum of the basic personal amount of the applicable personal income tax system for each employee ($18,571 in 2025), prorated by time spent on eligible activities.

3. Broad Eligibility That Reflects Modern Innovation

Crucially, the CRIC’s scope reflects how modern organizations innovate. Eligible work includes R&D activities consistent with the federal SR&ED definition, but the program also goes further by supporting a wide range of precommercialization activities. These may involve testing, technological validation, and regulatory studies required to obtain certifications or approvals before commercialization. The CRIC also extends to product design work, such as improving functionality, refining aesthetics and form, or selecting appropriate materials. To qualify, these precommercialization efforts must be directly linked to R&D performed in Québec by the claimant. 

The expansion is reflected not only in the types of activities recognized, but also in the categories of costs that may be claimed. Qualified expenditures must be incurred in Québec, and the program includes a broad set of cost components essential to innovation:

• Salaries and wages 
• 50% of subcontractor costs (in Québec) 
• 50% of payments to eligible universities, research centers, and research consortia 
• Capital expenditures and equipment acquisitions used directly for R&D or precommercialization 

The result is a more comprehensive model that supports not only scientific research and experimental development, but also the applied and commercialization phases that bridge prototypes to market-ready solutions. 

How FI Group by EPSA Helps You Capture the Opportunity 

Many companies conduct SR&ED eligible or CRIC-eligible work without labeling it as R&D, and FI Group can help uncovering these hidden opportunities. We help companies claim SR&ED and province-specific credits by guiding them through the entire process of identifying, documenting, and submitting eligible R&D activities in a way that aligns with CRA requirements. Our expertise will maximize your credit by identifying all qualifying expenditures while also reducing risks such as audits or claim reductions. 

• TRLs help organizations assess the maturity of a technology, from concept to deployment, offering a structured way to track progress and communicate clearly with stakeholders.
• By categorizing project stages, TRL enables better milestone tracking, resource allocation, and risk management throughout the innovation lifecycle.
• Projects may advance through or bypass certain TRL stages depending on their nature, making the framework flexible and adaptable.
• Many Canadian government programs use TRL as a criterion to determine which R&D projects qualify for financial support.

Innovation and RD&I projects pass through various phases, from the inception of an idea to the consolidation of the technology: therefore, a tool is necessary to assess a project’s stage quickly and universally. Among all the processes involved in the innovation cycle, the Technical Readiness Level (TRL) often serves as a crucial tool for Canadian companies, allowing organizations to systematically track the various stages of their projects and effectively communicate progress to internal teams and external stakeholders. 

By categorizing project stages, TRL helps identify the specific scope of each phase, assess progress against predefined milestones, establish realistic timelines, and outline the necessary resources required for successful completion. This structured approach not only fosters alignment and transparency among project participants but also facilitates informed decision-making and risk management throughout the innovation journey. 

But how does the TRL work? 

The TRL system assesses the maturity of a technology, ranging from Level 1 (Concept Evaluation) to Level 9 (Successful Deployment). Each of the nine levels marks a specific milestone in the progression of the project, where important activities take place. Although some stages may not apply to certain projects, most of the research and development initiatives will advance through all nine levels until they are effectively integrated into the market.  

It’s important to notice that the Technology Readiness Level (TRL) framework delineates various stages of technological maturity. In crafting its scale, it acknowledges the inherently non-linear nature of technological development, proposing that projects may advance through, or even bypass, certain levels depending on their specific requirements and objectives.  

Typically, these maturity levels are characterized by: 

1. Concept Evaluation
   the translation of scientific research into applied research. This is mostly exploration of a technology’s basic properties. 
2. Technology Evaluation
   the study of how technologies could be applied in the market. This is the point where the project’s direction takes form. 
3. Proof-of-Concept Research
   at this phase, active projects begin, and a technological solution is developed. This stage looks at the critical function of the technology and asks, “what is required for this technology to meet the application requirements?”. 
4. Early-Stage Prototype Development
   the integration and testing of basic components in a laboratory environment. This can be done multiple times during technological development to ensure that the technology is progressing toward its desired purpose. 
5. Late-Stage Prototype Development
   the integration and testing of basic components in a simulated environment. This is done following lab testing and usually involves accessing better testing equipment to identify potential issues. 
6. Simulated Environment Pilot
   upon completion of the technology design, final testing can commence. This will provide data critical to the commercialization phase where the technology is applied. 
7. Operational Environment Demonstration
   using the prototype in an operational environment to understand how it performs in non-simulated testing. Further development may be required to address performance issues. 
8. Final Testing and Evaluation
   upon further testing, the technology has proven itself to be successful under normal operating conditions. 
9. Successful Deployment
   the application of a technology, in its final form, in real-life conditions. 

Understanding TRLs is crucial as they can assist businesses in identifying and applying government funding programs relevant to various research phases. Numerous Canadian grant and loan programs for research and development initiatives utilize TRL as a criterion for eligibility, aimed at identifying technologies at specific stages of development. Government funding can support projects in advancing the innovation of a technological product to a more advanced development stage. 

Government Funding for Canadian Research and Development 

The Canadian government offers a variety of funding programs designed to support RD&I initiatives across all stages of technology readiness. These programs are crucial for advancing innovations from conception to commercialization. While most of the available funding is aimed at accelerating the development of established technologies, there are also specific grants and initiatives that focus on providing early-stage support for novel and groundbreaking concepts that have yet to be proven. 

TRLs serve as a critical framework in determining eligibility for these government funding programs. Each funding initiative typically emphasizes sectors or stages of development, which helps define the characteristics and requirements of the ideal applicant. By understanding your organization’s TRL, you can effectively navigate the landscape of available government incentives. This insight not only aids in identifying suitable funding opportunities but also empowers your business to craft a robust application, enhancing your chances of securing financial support for your innovative projects. 

FI Group can help you! 

If your company engages in R&D activities, you can count on us: we specialize in helping companies recognize innovation and secure funding for their Research and Development (R&D) activities through the comprehensive management of R&D Tax Credits. With over 1,400 qualified employees, including specialists from different fields, we are dedicated to supporting companies of all sizes and sectors. With our expertise, FI Group specialists can help your company identify the qualifying activities conducted and access the available benefits, optimizing your research and giving it even more space and investment. 

Despite common misconceptions in the sector, the program can and should be applied to technology projects. 

Key Takeaways 

• R&D is crucial to success in the IT industry, enabling companies to improve the quality and functionality of their products and services, and stand out in the marketplace. 
• Building diverse and multidisciplinary teams is essential to enrich creativity and problem-solving capabilities, resulting in innovative solutions that meet changing customer needs. 
• The SR&ED Tax Credit Program encourages companies to engage in R&D activities by offering tax credits and reimbursements. 
• Many companies have misconceptions about what qualifies R&D claims. Projects such as database development and website creation often do not meet the criteria for technological advancement. 
• For a project to be eligible for SR&ED, it must have detailed documentation, involve systematic research and experimentation, and seek to resolve technological uncertainties while achieving technological advancements. 

Research and Development (R&D) serves as a pivotal facet for achieving success in the rapidly evolving Information Technology (IT) industry. By strategically investing in innovative practices and technologies, companies can enhance the quality and functionality of their products and services, positioning themselves as frontrunners in a highly competitive marketplace. This commitment to innovation not only fosters improved user experiences but also facilitates the development of cutting-edge solutions that can disrupt traditional industry norms.  

Moreover, cultivating a diverse and multidisciplinary team is crucial; it brings together various perspectives, skills, and expertise, which enhances creativity and problem-solving capabilities. A collaborative approach to R&D encourages brainstorming and experimentation, resulting in groundbreaking solutions that effectively address the dynamic and diverse needs of customers. By staying ahead of industry trends and proactively responding to market demands, organizations can ensure sustained growth and relevance in an ever-changing technological landscape. 

SR&ED 

Aiming to encourage companies of all sectors and sizes to engage in research and development, the Scientific Research and Experimental Development (SR&ED) Tax Credit Program is Canada’s leading research-focused tax incentive program, offering tax incentives (such as refunds and credits) to companies engaged in qualifying activities in the country. 

SR&ED Claim for the IT Industry 

Within the IT area, numerous misconceptions exist regarding what can be considered – or not – eligible for R&D claims. Although it may involve innovative and ingenious projects, database development, business solutions, website creation, and application of standard software, they do not usually represent advances or overcome technological obstacles. Therefore, it is essential to remain aware of the type of projects developed by the company and how it can be presented to the Canada Revenue Agency (CRA). 

Examples of qualified IT projects may involve problems with encryption, compression, algorithms, logic, performance and quality issues, incompatibility issues, state-of-the-art IT, and combinations of media types. 

Regarding the Eligibility criteria, we can mention: 

• Documentation: detailed documentation is essential for your project to be properly registered and have the necessary support to prove its advances. It should include design documents, code changes, records of steps, tests, and results, forming a clear portfolio of your entire process. 
• Research and experimentation: Your project must conduct systematic research and/or experiments, aiming to create and test specific hypotheses to address and overcome technological uncertainties and obstacles, which may include: 
• Testing various algorithms to determine which one offers the best performance under specific conditions. 
• Experimenting with different software structures to evaluate compatibility with existing systems. 
• Iterative development cycles where tests and modifications are made to evaluate different approaches to solving a technological problem. 
• Technological Advancements and Technological Uncertainties: To be eligible, a project must aim to resolve a technological uncertainty that cannot be addressed using existing technologies. In doing so, it should also pursue a technological advancement, which doesn’t necessarily mean inventing something entirely new but can include improving existing technologies in terms of performance, scalability, efficiency, or other key metrics. Technological advancements should be described as the new conceptual knowledge gained through experimentation, which goes beyond the current state of the art in the industry. This knowledge should reflect insights that were not previously available or accessible through standard practices or publicly known solutions. 

Overall, the SR&ED program presents a significant opportunity for IT companies in Canada to fund their R&D initiatives, thereby contributing to innovation and technological advancement in several ways. 

FI Group can help you!  

If your company engages in research and development (R&D) activities and needs assistance identifying innovative projects or securing funding for your research, we are here to help. With over 1,400 qualified employees, including experts from various fields, FI Group is dedicated to supporting companies of all sizes and sectors. We help identify eligible activities and access the available R&D tax credits, ensuring that you optimize your research efforts while increasing scope and investment. 

Key Takeaways  

• The healthcare industry relies heavily on innovation, with professionals involved in developing innovative treatments, diagnostics, and technology that can improve patient care. 
• The SR&ED program offers tax credits and reimbursements for eligible research and development expenses, allowing healthcare professionals to offset costs and reinvest in further innovation. 
• To be considered eligible for the program, activities must meet the two requirements defined by the CRA: the WHY and the HOW, demonstrating the technological advancement (due to scientific or technological uncertainty, and a systematic investigation, along with a detailed documentation 
• Tax incentives help ease the financial burden of R&D activities, allowing companies to recoup part of their investment through credits. 
• Taking advantage of SR&ED benefits can provide a significant competitive advantage, and it is crucial to have expert advice to ensure compliance and maximize eligible claims. 

In the rapidly evolving healthcare sector, innovation is a critical component for advancing and improving patient care. Whether you’re a physician leading the way in novel treatment methodologies, a researcher delving into groundbreaking diagnostics that can revolutionize early detection, or a pharmacist at the forefront of designing sophisticated drug delivery systems that enhance therapeutic effectiveness, your work is often deeply rooted in extensive research and development (R&D).  

What many healthcare professionals may not fully appreciate is that these innovative endeavors could be eligible for considerable financial incentives through Canada’s Scientific Research and Experimental Development (SR&ED) program. This program is specifically designed to encourage innovation by providing tax credits and refunds for eligible R&D expenditures, including labor costs, materials, and some overhead expenses. By leveraging the SR&ED program, professionals in the healthcare industry can not only offset their R&D costs but also reinvest those savings into further innovation, leading to improved outcomes for patients and the healthcare system. 

Eligibility 

As with all other industries, eligibility in the healthcare industry is contingent upon meeting certain criteria. These are: 

1. Technological Advancement 
2. Systematic Investigation 
3. Detailed Documentation 

Intrinsic to each of these criteria are examples of activities that are eligible once completed, such as: 

• Innovative treatments, the development of new therapies and procedures that improve outcomes, increase efficacy, and reduce patient side effects. 
• Creation of new diagnostic tools, methods, and technologies, or innovative medical tools and devices. 
• Formulation, testing, and documentation of hypotheses, discoveries, and investigations that aim to overcome technological barriers and limitations. 
• Description of methods, procedures, results, progress, challenges throughout the R&D process, etc.  

The SR&ED program serves as a significant incentive for Canadian companies that are focused on advancing research and development initiatives. Whether involved in the creation of innovative medical devices, the exploration of advancements in pharmaceuticals, or other research activities, SR&ED provides a valuable opportunity to both support and recognize these innovative efforts. 

Benefits of Participating in the SR&ED Program 

Among the key benefits of R&D tax incentives in the healthcare sector, several important aspects can be highlighted. 

• Financial support: R&D tax incentives help organizations offset the substantial costs associated with research and development activities and can significantly alleviate the financial burden associated with innovative projects, fostering a culture of continued advancement and exploration in the healthcare field. 

• Tax credits: Companies engaged in eligible R&D activities can claim specific expenses as tax credits, which are designed to reduce their overall tax liability. This process allows organizations to recover a portion of their R&D investments through direct credits on their income tax returns. In many cases, if the total credits exceed the tax due, eligible companies can receive a cash refund, thus providing immediate financial relief and further incentivizing innovative pursuits. 

• Competitive advantage: Leveraging R&D tax benefits can improve an organization’s market position. By investing in research and developing innovative technologies or treatment methodologies, companies can differentiate themselves from their competitors. This strategic advantage not only drives innovation within the organization but can also lead to significant long-term profitability and growth. 

• Compliance expertise: Navigating the complexities of the R&D tax incentive program can seem overwhelming, given the detailed requirements and regulations involved. Partnering with and assisting consulting firms specializing in R&D can provide essential expertise, particularly in helping organizations understand and meet program specifications, maximize eligible claims, and mitigate audit risk through meticulous documentation and adherence to compliance standards. 

Medical innovation: a lever for the future 

Healthcare continues to evolve in line with other industries and technologies, creating and incorporating new ways to advance personal and general care, diagnostics, and personalized technology that could change the way medicine is viewed and practiced.

Taking advantage of tax incentives like SR&ED – and having access to the benefits provided by other industries – could be the key to greater investment and continuous improvement not only for companies and professionals but also for the daily lives of patients in Canada and around the world. 

FI Group can help you! 

Is your company active in research and development (R&D) and would you like to identify innovative projects or obtain financing for your work? FI Group is here to help you. 

With more than 1,400 qualified employees, including experts from various fields, FI Group supports companies of all sizes and sectors. We help you: 

• Identify eligible activities; 
• Access available tax credits; 
• Optimize your research efforts; 
• And increase your investment capacity. 

The new fund aims to empower Canadian SMEs to scale AI innovation 

Key takeaways 

• The AI ​​Compute Access Fund provides up to $5 million to support Canadian SMEs in accessing essential computing infrastructure to develop and commercialize AI solutions. 
• It covers up to 66% of costs with Canadian cloud-based AI compute providers and up to 50% with foreign providers (until March 2027). 
• Companies must be registered in Canada, have fewer than 500 employees, develop AI products or services, have R&D staff in the country, and demonstrate financial viability. 
• Applications are open until July 31, 2025. Selection considers market potential, management capacity, technological maturity, and public and economic benefits to Canada. 

On December 5, 2024, the Government of Canada officially launched the AI Compute Access Fund, a pivotal initiative within the framework of the Canadian Sovereign AI Compute Strategy. This ambitious program is backed by an investment of up to $300 million, aimed specifically at bolstering the capacity of Canadian small and medium-sized enterprises (SMEs).  

The fund is designed to facilitate access to high-performance computing infrastructure, which is essential for the development, testing, and commercialization of innovative artificial intelligence solutions. By providing these resources, the government seeks to empower SMEs to leverage cutting-edge technology, enhance their competitive edge in the global market, and foster a thriving ecosystem of AI research and application within Canada. 

Why this fund matters 

AI development is compute-intensive, and compute is often the most expensive part of the innovation pipeline. The AI Compute Access Fund aims to: 

• Accelerate the innovation and the commercialization of AI technologies by Canadian firms. 
• Provide targeted support to AI-focused SMEs with clear R&D and go-to-market strategies. 
• Encourage the use of a diverse range of compute providers, helping companies remain competitive in a rapidly evolving global landscape. 

What it offers 

Eligible applicants can receive financial support offered as either a non-repayable, conditionally repayable or repayable contribution to offset compute-related costs for projects lasting up to three years (until March 31, 2028). The funding structure includes: 

• Up to 66% coverage for AI compute services from Canadian cloud providers. 
• Up to 50% coverage for AI compute services from non-Canadian providers (until March 31, 2027). 

After April 1, 2027, only Canadian-based AI computer services will be eligible for funding. 

Who can apply 

To qualify for the program, applicants must have proposals with total eligible costs between $100,000 and $5 million and meet the following criteria: 

• Company Registration: Canadian-registered for-profit company and employ fewer than 500 full-time equivalent (FTE) employees, ensuring that the initiative supports small to medium-sized enterprises in the technology sector. 
• AI Development Focus: Be actively engaged in the development of artificial intelligence products or services, accompanied by a clear and viable commercialization plan that outlines strategies for bringing these innovations to market effectively. 
• Research & Development Requirements: A Canadian-based research and development (R&D) team is essential, with the company conducting all project-related activities within Canada. This requirement supports local innovation and job creation. 
• Financial Viability: Demonstrate existing revenue streams or secure a Series A investment to showcase financial stability and the potential for growth, which is crucial for the sustainability of the AI projects. 
• Contractual Agreements: have established (or be in the process of securing) contracts with compute service providers to ensure access to the necessary technological infrastructure required for their AI development and deployment. 

By fulfilling these criteria, applicants will be better positioned to leverage the resources and support available for AI innovation in Canada. 

Eligible Activities and Costs 

Funding can be used for activities such as: 

• Training AI models prior to commercial launch 
• Running inference services 
• Fine-tuning or improving existing AI models 

Eligible expenditures include: 

• Core compute and storage costs 
• AI/ML processing 
• Compute-specific licensing, security, and monitoring 

Costs like taxes, legal fees, and prepaid services beyond the agreement period are not eligible. 

How to Apply 

• Create an Account 

Applicants must create a My Canada Business Account and verify their identity to access the AI Compute Access Fund portal. 

• Submit a Statement of Interest (SOI) 

Applicants must provide standard business information and a high-level overview of their project, including how it will benefit from AI compute services and contribute to AI innovation in their industry and in Canada.
The program team will assess eligibility and alignment with program goals and respond within 5 business days. Approved applicants will be invited to submit a full application. 

• Submit a Full Application 

Only applicants who pass the SOI stage can submit a full application during the official Call for Proposals (CFP) period. 

The full application must include: 

• Business background and project scope 
• Budget and funding sources 
• Market potential and commercialization readiness 
• Team composition and compute service arrangements 
• Anticipated innovation, economic, and public benefits 

NOTE: Applicants may be asked to submit additional documentation within 5 business days. 

• Implementation and Monitoring 

Once approved, a Contribution Agreement will be signed. Recipients can begin claiming eligible costs and will be subject to regular progress check-ins. A final report will be required at the end of the project. 

Applications close on July 31, 2025, at 11:59 PM EST. 

Evaluation and Selection Criteria 

• After the application period closes, proposals will undergo a due diligence assessment based on: 
• Market potential and commercialization readiness 
• Management and financial capacity 
• Technology maturity 
• Economic, innovation, and public benefits to Canada 
• Alignment with Government of Canada priorities (e.g., job creation, IP development, environmental impact) 
• Funding decisions will also consider portfolio balance, including regional representation, ownership diversity, business size, and risk profile. 

The AI Compute Access Fund is a crucial initiative designed to empower Canadian AI companies by providing them with essential access to public funding for their innovative projects. As the demand for advanced computing resources rises, many businesses in the AI sector face the challenge of high infrastructure costs, which can impede their growth and development. This fund aims to alleviate some of these financial burdens by offering support tailored to companies that are keen on scaling their AI solutions. 

FI Group can help you. 

If your organization is leading innovative AI applications and wants to enhance its market presence, now is the perfect time to pursue funding opportunities. Consulting experts like FI Group can significantly boost your chances of success.  

We specialize in helping companies secure funding for their R&D efforts through effective management of R&D Tax Credits. With over 1.400 qualified professionals, we support businesses of all sizes in identifying qualifying activities and accessing available benefits. Our goal is to optimize your research initiatives by providing additional resources for your innovative projects.