Insights · Program changes
The SR&ED changes, correctly stated.
The largest expansion of SR&ED in more than a decade is now law, and much of the commentary about it quotes figures that were never enacted. Here is what actually changed, what it is worth, what quietly did not happen, and what to do about it before your next year end.
Published April 2026 · 8 minute read
The number you have probably been told is wrong
A great deal of the commentary still circulating says the enhanced expenditure limit rose from $3 million to $4.5 million. That figure came from a Department of Finance announcement in December 2024 and it was never enacted. Budget 2025 superseded it, raising the limit to $6 million, and Bill C-15 received royal assent on 26 March 2026. The CRA's own page now states the increase from $3 million to $6 million plainly.
The practical consequence: the maximum enhanced refundable credit available to a Canadian-controlled private corporation is now $2.1 million a year, where it was $1.05 million. If your last claim was scoped against the old limit, or against the $4.5 million figure, your ceiling is materially higher than whoever advised you believes.
$6Mexpenditure limit
$2.1Mmaximum enhanced credit
$15M to $75Mphase-out range
40%refundable, capital
Four changes that matter, and one that did not happen
- The limit doubled to $6 million. For taxation years beginning after 15 December 2024. The enhanced rate itself stays at 35%, and current expenditures within the limit remain fully refundable.
- The phase-out range widened to $15 million to $75 million of prior-year taxable capital employed in Canada, from the old $10 million to $50 million. This is the change that quietly matters most to growing companies: a business that would previously have lost the enhanced rate as it scaled now keeps it much longer. There is also now an election allowing a private corporation to have its phase-out determined by average gross revenue instead of taxable capital, which can favour capital-intensive manufacturers.
- Capital expenditures are eligible again, for the first time in over a decade, for both the deduction and the credit, where the property was acquired after 15 December 2024. One detail is widely misreported: capital is 40% refundable, not fully refundable like current expenditures. Equipment lease costs incurred after that date are also back in.
- Eligible Canadian public corporations now reach the enhanced 35% refundable credit, which was previously reserved for private corporations. Their phase-out is measured on average gross revenue over the three preceding years rather than on taxable capital, over the same $15 million to $75 million band.
What did not happen
There is no patent box. Finance consulted on one in 2024, the consultation closed, and Budget 2025 did not introduce it. Neither did the 2026 spring update. If you are being told to hold intellectual property in a particular structure in anticipation of a Canadian patent box regime, the regime does not exist and is not before Parliament.
What the CRA changed about how claims are handled
The administrative side moved at the same time, and for a first-time claimant the change is arguably bigger than the money. Since 1 April 2026 a corporation with gross business income under $25 million can request pre-claim approval: the CRA will determine whether up to three projects are eligible before the claim is filed, issue a determination within about eight weeks, and honour that approval for up to three years. Projects with pre-claim approval then face only an expenditure review, at a 90-day service standard rather than 180.
Two related services changed status. Pre-claim consultations ended on 1 January 2026. The First-Time Claimant Advisory Service continues, and the CRA is explicit that it is not a review of your claim and makes no determination about eligibility or expenditures.
What to do about it before your year end
- Re-scope against $6 million, not $3 million. Companies that trimmed projects to fit the old limit have been leaving eligible work out of their claims for two filing cycles.
- Reconsider equipment timing. A machine acquired for development work now carries a credit it would not have carried in 2023. The date of acquisition matters: property acquired before 16 December 2024 does not qualify.
- Check the phase-out arithmetic both ways. If taxable capital is pushing you into the phase-out, the gross-revenue election may keep you at the enhanced rate. It is worth modelling rather than assuming.
- If you are claiming for the first time, consider pre-claim approval. Eight weeks of waiting in exchange for a determination before you file is a good trade when the eligibility question is genuinely open.
- Do not let any of this delay a filing. The eighteen-month deadline is absolute and has no interaction with any of these changes.
A note on sources
The figures above are as enacted, taken from the CRA's own program pages, the Budget 2025 tax measures, and the bill itself. Two points, the gross-revenue election for private corporations and the revenue-based phase-out band for public corporations, appear consistently in the analyses published by the major accounting and law firms but are not yet described on any CRA page, so they rest on the legislation rather than on administrative guidance. Where a fact in this briefing is not yet reflected in CRA guidance, we say so rather than presenting it as settled practice.
Was your last claim scoped against the old limit?
If it was, there is a good chance work was left out. We can look at the last two filed years and tell you whether anything is recoverable.
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Figures reflect legislation enacted by Bill C-15, which received royal assent on 26 March 2026, and CRA program guidance current at the time of writing. Where a point rests on the legislation rather than on published CRA guidance, that is noted in the text. General information, not advice on a specific claim.
