For many Canadian companies, SR&ED remains one of the most valuable sources of non-dilutive funding they’ll access all year. It’s also the easiest program to get wrong.
If a SR&ED claim submission is on your horizon, here are a few critical things to keep in mind this year.
1. CRA Has Quietly Removed a Major Safety Net
As of January 1, 2026, CRA has discontinued its SR&ED pre-claim consultation service, removing a key mechanism companies previously relied on to validate eligibility before filing.
That said, Budget 2025 proposed a revamped pre-claim consultation process, intended to reduce audit timelines and improve predictability for claimants. While this signals a positive shift, the details of the new process have not yet been announced, and it is not yet available.
Until further guidance is released, companies that are unsure about eligibility will need to seek support elsewhere and ensure their claims are defensible at the tie of submission.
For more on what Budget 2025 proposed for SR&ED and business tax changes: https://northbridgeconsultants.com/2025/11/07/budget-2025-sred-gets-a-major-upgrade-key-business-tax-changes/
2. Strong Documentation is Not Optional
One of the biggest pitfalls we continue to see is companies relying on after-they-fact explanations rather than contemporaneous evidence.
CRA continues to expect:
- Clear descriptions of technological uncertainty
- Evidence of systematic investigation (iterations, testing, failures)
- Documentation that ties technical work to specific claimed costs
Tools like Jira, PM software platforms, or engineering notebooks can help, but only if they clearly demonstrate why the work was uncertain and how your team attempted to resolve it. High-level summaries or generic narratives can weaken an otherwise valid claim.
For a deeper breakdown of what to include (and what to avoid), see our guide to SR&ED documentation do’s and don’ts: https://northbridgeconsultants.com/2026/01/02/sred-documentation-dos-and-donts/
3. Previous Approvals Don’t Guarantee Future Success
A common (and risky) assumption is that if a project (or similar work) was approved in the past, it will be approved again.
CRA has consistently maintained that:
- Each claim year is assessed independently
- Eligibility must be reassessed annually
- Past success does not override current interpretation or evidence
Relying on historical approvals without re-evaluating eligibility can expose companies to denied claims, reductions or expanded reviews.
We explore this risk in more detail here: https://northbridgeconsultants.com/2026/01/27/the-hidden-risk-of-relying-on-previous-sred-approvals/
4. Proposed SR&ED Policy Changes Are Still Pending (But Don’t Ignore Them)
Several SR&ED policy changes have been proposed, but they have not yet been approved or enacted into legislation. As a result, companies cannot currently access or apply these changes in their claims.
However, they’re still important to be aware of, especially if your submission deadline is approaching. Once finalized, these changes could significantly impact how much credit your company can claim and how your expenditures are treated. And they will apply to claims with taxation years starting on or after December 16, 2024.
Key proposed changes:
- Enhanced Credit Cap: Expenditure limit for CCPCs to claim the 35% enhanced refundable credit rises from $3M → $6M.
- Higher Phase-Out Thresholds: Taxable capital limits increase to $15M/$75M for claiming the enhanced refundable credit.
- Public Corporation Eligibility: Certain Canadian public companies could access the enhanced 35% rate.
- Capital Expenditures Restored: Equipment and other capital items eligible for partial refundable credits.
We summarized the key proposed changes and what to watch for here: https://northbridgeconsultants.com/2025/09/23/major-sred-policy-changes-pending/
5. CRA is Implementing AI Into It’s Review Process
CRA has started experimenting with AI tools to review SR&ED claims, which could speed processing but also increase scrutiny on narratives and technical descriptions.
At the same time, claimants who rely on AI to draft their technical narratives should exercise caution:
- AI outputs can be tricky: If you input proprietary data into open-source AI, you risk confidentiality issues. If you avoid proprietary details, the AI-generated narrative may be too generic to reflect your company’s actual work in a way that CRA needs for it’s review.
- AI can help summarize documentation, but it cannot replace accurate, contemporaneous evidence of R&D work
- Claims need to clearly show technological uncertainty and systematic investigation specific to the company.
Key takeaway: Use AI responsibly to support your claim, but do not rely on it to replace real technical documentation or human oversight.
6. Timing Still Matters More than Companies Expect
SR&ED claims must be filed within 18 months of your fiscal year-end, but waiting until the last minute limits your ability to:
- Gather and find documentation
- Clarify technical narratives with your team
- Adjust for policy or process changes if guidance is released
Key Takeaway: The strongest claims are usually shaped well before filing, not rushed together at the deadline.
Bottom Line
SR&ED remains a powerful funding tool but it’s operating in a period of transition. Between the removal of pre-claim consultations, pending policy changes, and CRA’s move toward AI-assisted reviews, companies need to be more proactive, more precise, and more evidence-driven than in years past.
If you’re planning to file soon, now is the time to reassess eligibility, documentation, and timing, and ensure your claim reflects both current rules and near-term developments that could affect your submission.
SR&ED Readiness Check
Make sure your claim is ready with these key questions:
- Do we have contemporaneous documentation of all R&D work?
- Are we confident in eligibility under current SR&ED rules?
- Are we prepared to adapt if new policy guidance comes into effect?
Before you submit your SR&ED claim, reach out to us for a quick QC/sanity check to ensure your documentation and technical narratives are in order.
