Cases
National R&D Inc. v. Canada, 2022 FCA 72
In response to the taxpayer’s submission that the Tax Court judge erred in relying on the test from Northwest Hydraulic in that it was not a...
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| Tax Topics - General Concepts - Stare Decisis | courts are entitled to give precision to statutory language | 110 |
| Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. | interpretation is governed by interpretation principles and precedent rather than CRA guidance | 97 |
KAM-PRESS METAL PRODUCTS LTD. v. HER MAJESTY THE QUEEN, 2021 FCA 88
The taxpayer acknowledged that the work performed by it for which it claimed investment tax credits did not follow the scientific method as...
Jentel Manufacturing Ltd. v. Canada, 2012 DTC 5031 [at 6682], 2011 FCA 355
The taxpayer, a producer of plastic containers, undertook a project to "improve the existing product to make it a smaller and significantly...
Blue Wave Seafoods Inc. v. Canada, 2006 DTC 6155, 2006 FCA 81
The Tax Court judge had committed no reviewable error in finding that in the last two taxation years under review, there was no longer any...
R I S - Christie Ltd. v. Canada, 99 DTC 5087, [1999] 1 CTC 132 (FCA)
The taxpayer was entitled to have its expenditures treated as SR&ED notwithstanding the absence of documentary evidence relating to the...
See Also
Mold Leaders Inc. v. The King, 2023 TCC 127
The taxpayer (ML), carried on a business of the custom designing and making of injection molding including for the automotive industry. CRA...
Canafric Inc. v. The King, 2023 TCC 108
Canafric operated a food manufacturing business specializing in developing frozen pies for grocery chains and restaurants. Customers would request...
Buhler Versatile Inc. v. The King, 2023 TCC 18
Wong J allowed the claim of the taxpayer, which was the only Canadian manufacturer of agricultural tractors, respecting a project to build a...
Airzone One Ltd. v. The Queen, 2022 TCC 29
The taxpayer (“Airzone”) provided comprehensive air quality monitoring services to government agencies, international organizations, and...
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| Tax Topics - General Concepts - Evidence | taxpayer could call and cross-examine the CRA technical expert | 143 |
6398316 Canada Inc. v. The Queen, 2021 TCC 17
The taxpayer constructed a house intended to be uniquely energy efficient while staying within the price range of a “regular home”. It was...
WRD Borger Construction Ltd. v. The Queen, 2021 TCC 40 (Informal Procedure)
The taxpayer’s business included installing water mains and culverts in housing subdivisions. A particular project which it treated as SR&ED...
Logix Data Products Inc. v. The Queen, 2021 TCC 36
The taxpayer was an information technology company that undertook development of dual-purpose shingle sized solar panels that would be...
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| Tax Topics - General Concepts - Evidence | individual did not qualify as a participant expert | 128 |
Allegro Wireless Canada Inc. v. The Queen, 2021 TCC 27
The taxpayer provided a software platform to its clients to allow them to communicate remotely with their workers through wireless handheld...
National R&D Inc. v. The Queen, 2020 TCC 47, aff'd 2022 FCA 72
The taxpayer (“National”), which provided consulting services to clients, claimed to have made SR&ED expenditures of $68,029 and generated...
Béton mobile du Québec Inc. v. The Queen, 2019 TCC 278
The taxpayer (BMQ) used mobile concrete mixers to provide concrete at the site of construction or major repair projects. The following projects...
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| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) - Paragraph 37(8)(a) - Subparagraph 37(8)(a)(ii) - Clause 37(8)(a)(ii)(B) - Subclause (8)(a)(ii)(B)(IV) | managerial and supervisory payroll included | 256 |
Clevor Technologies Inc. v. The Queen, 2019 TCC 166 (Informal Procedure)
The taxpayer’s software, which determined the optimal timing and sequencing of steps for large construction or mining projects, ceased to work...
Exxonmobil Canada Ltd. v. The Queen, 2019 TCC 108
A participant in the Hibernia joint venture, treated its share of the costs of the initial well in one of the oil reservoirs (which was expected...
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| Tax Topics - Income Tax Regulations - Regulation 1204 - Subsection 1204(3) - Paragraph 1204(3)(a) | income not derived from transporting if no actual revenues therefrom | 378 |
CRL Engineering Ltd. v. The Queen, 2019 TCC 65 (Informal Procedure)
The taxpayer, which was an engineering firm specializing in developing public transit related technology, engaged in a project to develop its...
Concept Danat Inc. v. The Queen, 2019 TCC 32 (Informal Procedure)
The taxpayer, whose business was to embroider or imprint publicizing lettering on clothing engaged in three projects, none of which were found by...
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| Tax Topics - Income Tax Act - Section 37 - Subsection 37(1) - Paragraph 37(1)(a) - Subparagraph 37(1)(a)(i) | SR&ED claim could not be based on estimated hours worked | 141 |
Mac & Mac Hydrodemolition v. The Queen, 2017 TCC 256 (Informal Procedure)
The taxpayer (“Mac & Mac”) was approached by a potential client to use its expertise in hydrodemolition to develop a technique to remove the...
Life Choice Ltd. v. The Queen, 2017 TCC 21 (Informal Procedure)
The taxpayer was a natural health product company. Its alleged SR&ED consisted of reviewing the literature and consulting other researchers in...
Flavor Net Inc. v. The Queen, 2017 TCC 179 (Informal Procedure)
Project 705 (the “Plant Sterols Beverage Project”) of the taxpayer, which carried on an energy drink business, sought to develop a beverage...
Robotx Solutions Inc. v. The Queen, 2017 TCC 73 (Informal Procedure)
The taxpayer was a corporation that improved customer’s equipment by increasing their lifespan, improving their security mechanisms or by...
Formadrain Inc. v. The Queen, 2017 TCC 42 (Informal Procedure)
The taxpayer, whose business was the repair of sewers and other drains from the inside rather than through excavation, undertook two projects to...
Joel Theatrical Rigging Contractors (1980) Ltd. v. The Queen, 2017 TCC 6 (Informal Procedure)
The taxpayer (“JTR”) undertook a project in 2008 (the “Fire Curtain Project”) and in 2009 (the “Manual Override Project”) to solve two...
Emotion Picture Studios Inc. v. The Queen, 2015 TCC 323, 2016 DTC 1005 [at 2519] (Informal Procedure)
The taxpayer was engaged in determining how on-page and off-page variables for websites interrelate to determine their Google (or other internet...
ACSIS EHR (Electronic Health Record) Inc. v. The Queen, 2015 DTC 1212 [at 1366], 2015 TCC 263
The taxpayer had to adapt its existing system for implementing a nation-wide health information system in Belize given the severe...
Hypercube Inc. v. The Queen, 2015 DTC 1135 [at 859], 2015 TCC 65 (Informal Procedure)
Lamarre ACJ found that the taxpayer's development of code analysis software for websites was not experimental development. All problems...
6379249 Canada Inc. v. The Queen, 2015 DTC 1109 [at 638], 2015 TCC 77
After developing and commercially launching a miniature portable printer, the taxpayer pulled the product in 2009 after identifying problems with...
Feedlot Health Management Services Ltd. v. The Queen, 2015 TCC 32
The taxpayer, a veterinary consulting firm, undertook four research projects to test new diets, supplements, and vaccines on cattle, and paid...
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| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) - Paragraph 37(8)(a) - Subparagraph 37(8)(a)(ii) - Clause 37(8)(a)(ii)(B) | work by proxy need not be "for" SRED - only "in respect of" it | 320 |
1726437 Ontario Inc. (AirMax Technologies) v. The Queen, 2013 DTC 1008 [at 54], 2012 TCC 376 (Informal Procedure)
The taxpayer, which installed heating, air conditioning and ventilation systems in residential homes, claimed SR&ED credits relating to its "High...
Murray Arlin Dentistry Professional Corporation v. The Queen, 2012 DTC 1149 [at 3339], 2012 TCC 133 (Informal Procedure)
Woods J. found that it was not reasonable for the taxpayer, a professional corporation belonging to Dr. Arlin, to claim credits on the basis that...
Soneil International Limited v. The Queen, 2011 DTC 1282 [at 1592], 2011 TCC 391
D'Arcy J. denied the taxpayer's claimed SR&ED credits arising from the development of various electrical systems for use in wheelchairs - a power...
Advanced Agricultural Testing Inc. v. The Queen, 2009 DTC 687, 2009 TCC 190
The taxpayer in carrying out work largely under the supervision of a researcher who was not its employee or representative, and in testing the...
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| Tax Topics - Income Tax Act - Section 37 - Subsection 37(10) | 27 |
Zeuter Development Corporation v. The Queen, 2007 DTC 41, 2006 TCC 597 (Informal Procedure)
Little J found that a project of developing an interactive software tool to assist high school students with physics and mathematics did not...
Tacto Neuro Sensory Devices Inc./Appareils Neurosensoriels Tacto Inc. v. The Queen, 2005 DTC 457, 2004 TCC 341
Work carried out by the taxpayers to improve the performance of a tactometer represented "routine techniques and standard procedures generally...
Maritime-Ontario Freight Lines Limited v. The Queen, 2003 DTC 1410, 2003 TCC 674 (Informal Procedure)
Various efforts made by the taxpayer to improve the accuracy of a freight weighing device did not qualify given that there was "some merit" in the...
C W Agencies Inc v. The Queen, 2000 DTC 2372 (TCC), aff'd 2002 DTC 6740, 2001 FCA 393
Bonner T.C.J. accepted (at p. 2382) the evidence of the Crown's expert that the cost incurred by a lottery ticket marketer in developing an...
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| Tax Topics - General Concepts - Onus | 105 |
Knowledge Systems Inc. v. The Queen, 2000 DTC 2353 (TCC)
McArthur TCJ found (at p. 2360):
"What the Appellant did was take existing technology computer hardware and PacRat software, and record personal...
Safety Plus Inc. v. The Queen, 99 DTC 537, [1999] 3 CTC 2123 (TCC)
Two projects for the development of a system for recycling sludge or dealing more economically with the disposition of waste chemicals did not...
116736 Canada Inc. v. The Queen, 98 DTC 1816, [1998] 3 CTC 2679 (TCC)
Before finding that the taxpayer had been engaged in qualifying SR&ED, Archambault TCJ. noted (at p. 1821) that the Act and Regulations "do not...
Data Kinetics Ltd. v. The Queen, 98 DTC 1877, [1998] 4 CTC 2618 (TCC)
The taxpayer, which was engaged in researching and developing advanced data management and memory management software systems for large mainframe...
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| Tax Topics - Income Tax Act - Section 37 - Subsection 37(8) - Paragraph 37(8)(a) | 144 |
Northwest Hydraulic Consultants Ltd. v. The Queen, 98 DTC 1839, [1998] 3 CTC 2520 (TCC)
The taxpayer was an engineering consultant firm that specialized in the development, management and protection of water resources. Of the five...
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| Tax Topics - Statutory Interpretation - Interpretation Bulletins, etc. | 72 |
Telecomsyst Services Inc. v. The Queen, 97 DTC 684 (TCC)
The taxpayer was found not to be engaged in SR&ED given that the only tests conducted by it in the year in question was testing of devices already...
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| Tax Topics - General Concepts - Evidence | 94 |
Progressive Solutions Inc. v. The Queen, 96 DTC 1232 (TCC)
Archambault TCJ. accepted the evidence of the taxpayer's expert witness that the development by the taxpayer of a program improved an existing...
ETA Performance Systems Corp. v. MNR, 93 DTC 451, [1993] 1 CTC 2710 (TCC)
A supposed research project which folded after the initial phases of work and therefore consisted only of routine data collection and research in...
Canalerta Technologies Inc. v. MNR, 93 DTC 165, [1993] 1 CTC 2141 (TCC)
In finding that "thinking, contemplating and meditating" by a researcher did not constitute scientific research and experimental development, Rip...
Revelations Research Ltd. v. MNR, 92 DTC 1036, [1992] 1 CTC 2136 (TCC)
Christie A.C.J. accepted the evidence of the Crown's scientific expert that the proposed research program of the taxpayer was not carried out in...
Sass Manufacturing Ltd. v. MNR, 88 DTC 1363, [1988] 1 CTC 2524 (TCC)
The taxpayer's appeal failed with respect to the deduction of expenses it incurred in manufacturing a machine in accordance with the engineering...
Administrative Policy
6 February 2014 External T.I. 2013-0512191E5 - Mining Activities and SR & ED
An expenditure incurred by a resource corporation which qualifies as Canadian exploration expense cannot be a qualified expenditure in respect of...
18 September 2013 Draft examples to illustrate key concepts in the Eligibility of Work for SR&ED Investment Tax Credits Policy
CRA provides 10 examples to clarify its position on its SR&ED Investment Tax Credits Policy:
Examples dealing with subheading 2.1.1 ("Was there a...
Eligibility of Work for SR&ED Investment Tax Credits Policy, 24 April 2015
In the first step of CRA's two-step analysis of SR&ED ("determine if there is SR&ED" and "determine the extent of eligible work"), CRA sets out...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 158 |
Eligibility of Work for SR&ED Investment Tax Credits Policy, 24 April 2015
Regarding the second step of CRA's two-step analysis of SR&ED ("determine if there is SR&ED" and "determine the extent of eligible work"), CRA...
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 597 |
19 November 2012 External T.I. 2012-0459351E5 - Shale Gas Well Drilling Classification
In considering the conditions under which a shale gas well would qualify for Canadian development expense credits, CRA noted that drilling the...
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| Tax Topics - Income Tax Act - Section 66.2 - Subsection 66.2(5) - Canadian development expense - Paragraph (a) | 126 |
Scientific Research and Experimental Development Directorate: "The CRA's perspective on the New SR&ED Claim Form", Tax for the Owner-Manager, Vol. 9, No. 4, October, 2009, p. 1.
Application Policy SR & ED 2002-02R "Experimental Production and Commercial Production With Experimental Development Work - Allowable SR&ED Expenditures".
Application Policy SR & ED 96-09 "Eligibility of Clinical Trials to Meet Regulatory Requirements"
Application Policy SR & ED 96-08 "Eligibility of the Preparation of New Drug Submissions"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |
Application Policy SR & ED 96-07 "Prototypes, Custom Products/Commercial Assets, Pilot Plants and Experimental Production"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |
Application Policy SR & ED 96-02 "Tests and Studies Required to meet Requirements in Regulated Industries"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |
SR & ED 95-03 "Claims for ISO 9000 Registration"
SR & ED 95-02R "Science Eligibility Guidelines for the Oil & Gas of Mining Industries"
SR & ED 95-01R "Linked Activities - Regulation 2900(1)(d)"
IC86-4R3 "Scientific Research and Experimental Development"
IT-151R4 "Scientific Research and Experimental Developmental Expenditures"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |
Application Policy SR & ED 96-08 "Eligibility of the Preparation of New Drug Submissions"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |
Application Policy SR & ED 96-07 "Prototypes, Custom Products/Commercial Assets, Pilot Plants and Experimental Production"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |
Application Policy SR & ED 96-02 "Tests and Studies Required to meet Requirements in Regulated Industries"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |
IT-151R4 "Scientific Research and Experimental Developmental Expenditures"
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| Tax Topics - Income Tax Act - Section 248 - Subsection 248(1) - Scientific Research & Experimental Development | 0 |