Newfoundland and Labrador

Research and development tax credit

The Newfoundland and Labrador research and development tax credit is administered by the Canada Revenue Agency (CRA) and is fully refundable at the rate of 15% of eligible expenditures.

Available to:
Taxpayers, including corporations and individuals, beneficiaries of a trust, and members of a partnership, with a permanent establishment in Newfoundland and Labrador, for scientific research and experimental development (SR&ED) carried out in this province

Base:
Eligible expenditures

Eligible work and expenditures:
Those that qualify for federal SR&ED tax credits

Filing deadline for claiming the credit:
12 months after the filing due date

Carryback / carryforward:
Not applicable

Assistance:
Eligible expenditures are not reduced by government and non-government assistance, including the Newfoundland and Labrador R&D tax credit, except with respect to Harmonized sales tax (HST) and Goods and services tax (GST) input tax credits. The Newfoundland and Labrador R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
Not applicable

Ability to renounce:
Not applicable

Forms:
T2SCH301 Newfoundland and Labrador Research and Development Tax Credit (Corporations)
T1129 Newfoundland and Labrador Research and Development Tax Credit (Individuals)

Legislation:
Section 42 of the Income Tax Act (Newfoundland and Labrador)

Provincial Web site:
Newfoundland and Labrador – Research and Development Tax Credit

Nova Scotia

Research and development tax credit

The Nova Scotia research and development tax credit is administered by the CRA and is fully refundable at the rate of 15% of eligible expenditures.

Available to:
Corporations, corporations that are beneficiaries of a trust, and corporations that are members of a partnership, with a permanent establishment in Nova Scotia, for scientific research carried out in this province

Base:
Eligible expenditures

Eligible work and expenditures:
Those that qualify for federal SR&ED tax credits

Filing deadline for claiming the credit:
18 months after the corporation's tax year-end

Carryback / carryforward:
Not applicable

Assistance:
Eligible expenditures are reduced by government and non-government assistance, but not the Nova Scotia R&D tax credit. The Nova Scotia R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
A recapture will create or increase Nova Scotia tax otherwise payable.

Ability to renounce:
On or before six months after the corporation's tax year-end

Form:
T2SCH340 Nova Scotia Research and Development Tax Credit

Legislation:
Section 41 of the Income Tax Act (Nova Scotia) (PDF, 509 KB)

Provincial Web site:
Nova Scotia – Research and Development Tax Credit

New Brunswick

Research and development tax credit

The New Brunswick research and development tax credit is administered by the CRA and is 15% Refundable on eligible expenditures incurred after December 31, 2002, and 10% Non-refundable on eligible expenditures incurred before January 1, 2003.

Available to:
Corporations, corporations that are beneficiaries of a trust, and corporations that are members of a partnership, with a permanent establishment in New Brunswick, for SR&ED carried out in this province

Base:
Eligible expenditures

Eligible work and expenditures:
Those that qualify for federal SR&ED tax credits

Filing deadline for claiming the credit:
Not applicable

Carryback / carryforward:
Non-refundable tax credits can be carried back 3 years and forward 7 years.

Assistance:
Eligible expenditures are reduced by government and non-government assistance, but not the New Brunswick R&D tax credit. The New Brunswick R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
A recapture will create or increase New Brunswick tax otherwise payable.

Ability to renounce:
Only applies to eligible expenditures incurred prior to January 1, 2003
Not applicable for refundable tax credit

Form:
T2SCH360 New Brunswick Research and Development Tax Credit

Legislation:
Section 59 of the New Brunswick Income Tax Act

Provincial Web site:
New Brunswick – Research and Development Tax Credit

Quebec

For information with respect to Quebec's R&D tax credits, please visit the provincial Web site at:
Scientific Research and Experimental Development – Quebec

Ontario

Ontario innovation tax credit (OITC)

The Ontario innovation tax credit is administered by the CRA after December 31, 2008, and is fully refundable at the rate of 8% of qualified expenditures.

The annual expenditure limit of $3,000,000 of qualified expenditures is phased out when the corporation's taxable paid-up capital for its preceding tax year exceeds $25,000,000 and, it is eliminated when it reaches $50 million. The expenditure limit is also phased out when the corporation's taxable income for its preceding tax year is over $500,000 but does not exceed $800,000.

Available to:
All corporations with a permanent establishment in Ontario, for SR&ED carried out in this province

Base:
Qualified expenditures

Eligible work and expenditures:
Only expenditures for SR&ED carried on in Ontario, for which the taxpayer is eligible for the federal SR&ED investment tax credit (ITC), qualify for the OITC.

Ontario rules draw on the federal SR&ED rules relating to the definition of SR&ED, qualified expenditures, the expenditure limit, and its reduction based on prior-year taxable income. Prescribed federal form T2SCH31 must be filed to claim the OITC.

Filing deadline for claiming the credit:
Not applicable

Carryback / carryforward:
Not applicable. Any OITC in excess of tax otherwise payable will be refunded.

Assistance:
Qualified expenditures are reduced by government and non-government assistance, but not the OITC, Ontario business-research Institute tax credit (OBRITC), Ontario research and development tax credit (ORDTC), or the federal SR&ED ITC. The OITC will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
Not applicable

Waiver of tax credit:
A corporation can waive the tax credit, or a portion of the tax credit, by delivering a written waiver with its return, which is required to be filed on or before six months after the corporation's tax year-end, or on an amended return for that year.

Forms:
Before 2009
Ontario OITC claim form/guide for 2005 and subsequent tax years

For 2009 and later tax years
T2SCH566 Ontario Innovation Tax Credit

Legislation:
Before 2009
Section 43.3, Ontario Innovation Tax Credit, Corporations Tax Act

For 2009 and later tax years
Section 96, Ontario Innovation Tax Credit, Taxation Act, 2007

A corporation's income and taxable income for Ontario purposes are determined by the Corporations Tax Act (Ontario) for tax years ending before 2009 and by the Taxation Act, 2007 (Ontario) for tax years ending after 2008.

Although the CRA has been reviewing and processing OITC claims since April 3, 2008, the Ontario Ministry of Revenue is responsible for (re)assessments until January 1, 2009. The CRA will fully administer the tax credit for subsequent tax years.

Ontario

Ontario business-research institute tax credit (OBRITC)

The Ontario business-research institute tax credit is administered by the CRA after December 31, 2008, and is fully refundable at the rate of 20% of qualified expenditures.

There is a $20 million annual cap. The cap must be allocated within an associated group of corporations.

Available to:
Corporations and corporations that are members of partnerships (other than specified members) with a permanent establishment in the province of Ontario in respect of qualified expenditures on SR&ED incurred under eligible contracts with eligible research institutes (ERIs)

A list of ERIs is available by going to the following web site: Ontario Business-Research Institute Tax Credit.

A qualifying corporation or partnership of which it is a member that is claiming the OBRITC is no longer required to apply to the Ontario Minister of Revenue for an advanced ruling, with respect to eligible contracts entered into after August 9, 2007. When a corporation or a partnership of which it is a member has entered into a contract on or before August 9, 2007, it may be eligible for an administrative concession with respect to the ruling requirement.

Base:
Qualified expenditures

Eligible work and expenditures:
Ontario rules mirror federal SR&ED rules regarding the definition of SR&ED and qualified expenditures other than an expenditure that may reasonably be considered to fund the payment of salary or wages to an employee of the eligible research institute who is connected to the corporation making the expenditure or a prescribed type expenditure.

Ontario law does not require prescribed federal form T2SCH31 to be filed to claim the OBRITC.

Filing deadline for claiming the credit:
Not applicable

Carryback / carryforward:
Not applicable
Any OBRITC in excess of tax otherwise payable will be refunded.

Assistance:
Qualified expenditures are reduced by government and non-government assistance, but not the OBRITC, OITC, ORDTC, or the federal SR&ED ITC. The OBRITC will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
Not applicable

Ability to renounce:
Not applicable

Forms:

For 2009 and later tax years
T2SCH568 Ontario Business-Research Institute Tax Credit
T2SCH569 Ontario Business-Research Institute Tax Credit – Contract Information

Legislation:
Before 2009
Section 43.9 Ontario Business-Research Institute Tax Credit, Corporations Tax Act

For 2009 and later tax years
Section 97 Ontario Business-Research Institute Credit, Taxation Act, 2007

A corporation's income and taxable income for Ontario purposes are determined by the Corporations Tax Act (Ontario) for tax years ending before 2009 and by the Taxation Act, 2007 (Ontario) for tax years ending after 2008.

Although the CRA has been reviewing and processing OBRITC claims since April 3, 2008, the Ontario Ministry of Revenue is responsible for (re)assessments until January 1, 2009. The CRA will fully administer the tax credit for subsequent tax years.

Ontario

Ontario research and development tax credit (ORDTC)

The Ontario research and development tax credit (ORDTC) is administered by the CRA after December 31, 2008 and is non-refundable at the rate of 3.5% of eligible expenditures.

The Corporations Tax Act (Ontario) provided a deduction, equal to the portion of the federal ITC, related to qualified expenditures for SR&ED work undertaken in Ontario. With corporate income tax base harmonization, this incentive will automatically expire for tax years ending after 2008.

The 3.5% non-refundable ORDTC was established to maintain Ontario's tax advantage.

Available to:
Corporations with a permanent establishment in Ontario, for SR&ED carried out in this province

Base:
Eligible expenditures

Eligible work and expenditures:
Those that qualify for federal SR&ED tax credits Prescribed federal form T2SCH31 must be filed to claim the ORDTC.

Filing deadline for claiming the credit:
Not applicable

Carryback / carryforward:
Carry back 3 years to reduce Ontario corporate income tax payable, but not to a tax year that ends before January 1, 2009.
Carry forward 20 years

Assistance:
Eligible expenditures are reduced by government and non-government assistance, but not the ORDTC or the federal SR&ED ITC. The ORDTC will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
Any recapture will create or increase Ontario tax otherwise payable.

Waiver of tax credit:
A corporation can waive the tax credit, or a portion of the tax credit, by delivering a written waiver with its return, which is required to be filed on or before six months after the corporation's tax year-end, or on an amended return for that year.

Forms:
T2SCH508 Ontario Research and Development Tax Credit

Legislation:
Sections 38 to 45 of the Taxation Act, 2007 (Ontario)

A corporation's income and taxable income for Ontario purposes are determined by the Corporations Tax Act (Ontario) for tax years ending before 2009 and by the Taxation Act, 2007 (Ontario) for tax years ending after 2008.

Although the CRA has been reviewing and processing ORDTC claims since April 3, 2008, the Ontario Ministry of Revenue is responsible for (re)assessments until January 1, 2009. The CRA will fully administer the tax credit for subsequent tax years.

Ontario

Ontario transitional tax debits and credits

The Ontario transitional tax debits and credits are administered by the CRA after December 31, 2008.

Corporations may be subject to an Ontario transitional tax debit or be eligible to claim an Ontario transitional tax credit due to the harmonization of the two legislative acts governing federal and Ontario income taxes.

Available to:
Specified corporations that are subject to Ontario transitional tax debit or claiming the Ontario transitional tax credit. The definition of specified corporations is available on form T2SCH506. There is a link to the form below.

Filing deadline for claiming the credit:
Form T2SCH506 must be filed with the claimant's T2 Corporate Income Tax Return.
Form T2SCH507 is a worksheet and is not required to be filed with the claimant's income tax return.

For Ontario and federal corporate income tax purposes, taxpayers typically have tax pools with respect to amounts that can be carried over to another tax year—for example the pool for unclaimed SR&ED expenditures. Currently, tax pool balances may be different for federal and Ontario purposes. However, upon harmonizing with the federal definition of taxable income, each Ontario tax pool balance will assume its federal value (the amount in the federal pool). In many cases, this will require upward and downward adjustment to the Ontario pools, which may result in future Ontario tax gains or losses for corporations. SR&ED performers may elect to defer the effects of the transitional tax debit related to unclaimed SR&ED expenditures.

Forms:
T2SCH506 Ontario Transitional Tax Debits and Credits
T2SCH507 Ontario Transitional Tax Debits and Credits Calculation

Legislation:
Sections 46 to 53 of the Taxation Act, 2007 (Ontario)

A corporation's income and taxable income for Ontario purposes are determined by the Corporations Tax Act (Ontario) for tax years ending before 2009 and by the Taxation Act, 2007(Ontario) for tax years ending after 2008.

Information Bulletin 4011:
Explanatory Notes on Calculation of Transitional Tax Debits and Credits for Ontario Corporations

Manitoba

Research and development tax credit

The Manitoba research and development tax credit is administered by the CRA and is non-refundable at the rate of 20% on eligible expenditures incurred after March 8, 2005, and 15% on eligible expenditures incurred before March 9, 2005.

The credit is refundable for eligible expenditures after 2009 for corporations that work with eligible institutes in Manitoba.

The 2010 Budget extends refundability of the Manitoba research and development tax credit to in-house R&D expenditures (R&D not undertaken by an institute in Manitoba). The refundable portion will be one-quarter in 2011 and one-half in 2012.

List of potentially eligible institutions (PDF, 15KB)

Available to:
Corporations, including corporations that are beneficiaries of a trust and corporations that are members of a partnership with a permanent establishment in Manitoba, for SR&ED carried out in this province

Base:
Eligible expenditures

Effective January 1, 2014, the definition of "eligible expenditure" has been amended so as:

• to follow the federal reduction in the prescribed proxy amount
• not to follow the federal change to SR&ED provisions disallowing capital expenditures.
• to follow the federal reduction to 80% of the claimable portion of contract payments with the exception of contract payments to eligible educational institutions in Manitoba which remain fully eligible.

Eligible work and expenditures:
Those that qualify for the federal SR&ED tax credit

Filing deadline for claiming the credit:
1 year after the filing due date

Carryback / carryforward:
Non-refundable tax credits can be carried back 3 years and forward 10 years for tax years ended after 2003 and carried back 3 years and forward 7 for tax years ended before 2004 and applied against the Manitoba income taxes payable.

The non-refundable tax credit carry forward period has been extended to 20 years for tax years ended after 2005.

Assistance:
Eligible expenditures are reduced by government and non-government assistance.
The Manitoba R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
Not applicable

Ability to renounce:
A corporation can renounce its entitlement to all or part of the Manitoba R&D tax credit that is attributable to eligible expenditures incurred in a tax year up to one year after its filing due date for the tax year. For federal purposes, the Manitoba R&D tax credit must be renounced on or before six months after the corporation's tax year-end.

Form:
T2SCH380 Manitoba Research and Development Tax Credit

Legislation:
Sections 7.3 & 7.4 of the Income Tax Act (Manitoba)

Provincial Web site:
Manitoba – Research and Development Tax Credit

Saskatchewan

Research and development tax credit

The Saskatchewan research and development tax credit is administered by the CRA and is non-refundable at the rate of 10% for all eligible expenditures after March 31, 2015, 15% for all eligible expenditures occurring before March 19, 2009, and refundable at the rate of 15% for all eligible expenditures occurring after March 18, 2009 and before April 1, 2015.

Effective for qualifying R&D expenditures incurred on or after April 1, 2012, the refundable R&D Tax Credit for Canadian-controlled private corporations (CCPC) will be subject to a maximum annual limit of $3.0 million in qualifying expenditures. Qualifying expenditures in excess of this annual limit, as well as all qualifying expenditures by other corporations, will now be eligible for a 15% non-refundable R&D Tax Credit. The non-refundable credit can be carried back 3 years and forward 10 years to be applied against Saskatchewan Corporation Income Tax otherwise payable.

Available to:
Corporations, including corporations that are beneficiaries of a trust and corporations that are members of a partnership, with a permanent establishment in Saskatchewan, for SR&ED carried out in the province

Base:
Eligible expenditures

Eligible work and expenditures:
Those that qualify for the federal SR&ED tax credit

Filing deadline for claiming the credit:
Not applicable

Carryback / carryforward:
Non-refundable tax credits can be carried back 3 years and forward 10 years and applied against Saskatchewan income taxes payable.

Assistance:
Eligible expenditures are reduced by government and non-government assistance, but not the Saskatchewan R&D tax credit. The Saskatchewan R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
Not applicable

Ability to renounce:
Non-refundable tax credits can be renounced on or before the date by which the R&D tax credit would otherwise reduce any deduction of the corporation because of federal paragraph 37(1)(d) or reduce the corporation's qualified expenditures under any of subsections 127(18) to (20).

Form:
T2SCH403 Saskatchewan Research and Development Tax Credit

Legislation:
Sections 63 and 63.1 of The Income Tax Act, 2000 (Saskatchewan)

Provincial Web site:
Saskatchewan – Research and Development Tax Credit

Alberta

Scientific research and experimental development tax credit

The Alberta scientific research and experimental development tax credit is administered by the Alberta Ministry of Finance and Enterprise and is refundable at the rate of 10% on up to $4 million in eligible expenditures of a qualified corporation, for a maximum credit of $400,000.

Available to:
Corporations with a permanent establishment in Alberta, for SR&ED activities carried out in this province after December 31, 2008

Base:
Eligible expenditures

For tax years ending after December 31, 2012 the definition of "eligible expenditure" has been amended so as to follow the federal reduction in the prescribed proxy amount.

Eligible work and expenditures:
Those that qualify for the federal SR&ED tax credit and were incurred in Alberta after December 31, 2008

Filing deadline for claiming the credit:
15 months after the corporation's filing due date

Carryback / carryforward:
Not applicable

Assistance:
Eligible expenditures are reduced by government and non-government assistance except for the Alberta SR&ED tax credit and the federal SR&ED ITC. The Alberta SR&ED tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
A recapture will create or increase Alberta tax otherwise payable.

Ability to renounce:
Not applicable

Forms:
AT1 Schedule 9
AT1 Schedule 9 Supplemental
AT4960 – Listing of projects – Attach to AT1 Schedule 9
AT1 Schedule 16

Guide:
Guide SR&ED AT1 Schedule 9 and AT1 Schedule 9 Supplemental

Information Circular:
SRED-1R1, Alberta Scientific Research and Experimental Development (SR&ED) Tax Credit

Legislation:
Sections 26.6 to 26.9 of the Alberta Corporate Tax Act*

*Under 'Search alphabetically' click on 'A', Scroll down and click on 'Alberta Corporate Tax Act', Under 'Alberta Corporate Tax Act' click on 'pdf' or 'html'.

Provincial Web site:
2008 Budget / Tax Advantage – See page 153
Alberta Corporate Tax Overview – Includes SR&ED tax credit links

British Columbia

Scientific research and experimental development tax credit

The British Columbia scientific research and experimental development tax credit is administered by the CRA and is refundable for CCPCs up to 10% of the expenditure limit (i.e., $3m x 10% = $300,000) and non-refundable otherwise at a rate of 10% of SR&ED qualified British Columbia expenditures.

Available to:
Corporations and corporations that are members of partnerships (other than specified members) with a permanent establishment in British Columbia, for SR&ED carried out in this province

Base:
British Columbia qualified expenditures by a qualified corporation

Eligible work and expenditures:
British Columbia rules parallel the federal SR&ED rules relating to the definition of SR&ED, qualifying expenditures, and the expenditure limit.

The tax credit is refundable for CCPCs at the rate of 10% of the corporation's SR&ED British Columbia qualified expenditures for the tax year.

The British Columbia SR&ED tax credit has been extended to allow corporations that are members of partnerships to claim their proportionate share of the partnership's SR&ED carried on in British Columbia, for qualified expenditures after February 20, 2007.

Filing deadline for claiming the credit:
18 months after the corporation's tax year-end

Carryback / carryforward:
Non-refundable tax credits can be carried back 3 years and carried forward 10 years to reduce British Columbia income taxes payable.

Assistance:
Provincial qualified expenditures are reduced by government and non-government assistance, but not the British Columbia SR&ED tax credit. The British Columbia SR&ED tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
A recapture will create or increase British Columbia tax otherwise payable.

Ability to renounce:
Applies to non-refundable tax credits only

Form:
T666 British Columbia Scientific Research and Experimental Tax Credit

Legislation:
Sections 97 to 103 of the Income Tax Act (British Columbia)

Provincial Web site:
British Columbia – Research and Development Tax Credit

Yukon

Research and development tax credit

The Yukon research and development tax credit is administered by the CRA and is refundable at the rate of 15% of eligible expenditures. An additional 5% is available on amounts paid or payable to the Yukon College.

Available to:
Corporations with a permanent establishment in the Yukon at any time in the year, individuals who are resident in the Yukon on the last day of the year, including beneficiaries of a trust, and members of a partnership, for SR&ED carried out in the Yukon

Base:
Eligible expenditures

Eligible work and expenditures:
Those that qualify for federal SR&ED tax credits

Filing deadline for claiming the credit:
12 months after the filing due date

Carryback / carryforward:
Not applicable

Assistance:
Eligible expenditures are reduced by government and non-government assistance, but not the Yukon R&D tax credit. The Yukon R&D tax credit will reduce the federal pool of deductible SR&ED expenditures and qualified SR&ED expenditures.

Recapture:
Not applicable

Ability to renounce:
Not applicable

Forms:
T2SCH442 Yukon Research and Development Tax Credit (Corporations)
T1232 Yukon Research and Development Tax Credit (Individuals)

Legislation:
Section 15 of the Income Tax Act (Yukon)

Territorial Web site:
Yukon – Research and Development Tax Credit