WRD Borger – Tax Court finds that a taxpayer was engaged in trial and error rather than SR&ED

The taxpayer’s business included installing culverts in housing subdivisions. A particular project was seeking to instal and tie-in new box culverts with existing box culverts that, in turn, hooked into a catchment pond 4 meters below the water surface. After trying various approaches, what ultimately worked was using a combination of a concrete cap, small objects, and pumps to dewater a square culvert (so that its workers could work inside it and instal the necessary tie-ins).

In confirming the disallowance of the taxpayer’s related SR&ED claims, Wong J stated inter alia that the taxpayer’s approach “was more akin to problem-solving by trial and error than formulating hypotheses and systematically testing them to reduce or eliminate a technological uncertainty.”

Neal Armstrong. Summary of WRD Borger Construction Ltd. v. The Queen, 2021 TCC 40 under s. 248(1) - SR&ED.