Linking SR&ED to Government Grants: IRAP

The Provincial and Federal government work together to deliver funding programs to encourage companies to invest in innovation.  The Scientific Research and Experimental Development (SR&ED) program funds R&D work conducted in Canada in the form of a tax credit. On the other hand, the Industrial Research Assistance Program (IRAP) provides grant funding for new technology-driven projects.

IRAP supports companies that are investing in new technology projects that lead to new products, processes, or services in Canada, and will cover labour and subcontractor costs.  IRAP is ideal for companies that require funding for early-stage R&D and prototyping, whereas SR&ED has a wider scope of coverage that also includes experimental development.  Applicants are allowed to apply to both IRAP and SR&ED as expenditures are not double-claimed. Since IRAP eligible costs can potentially overlap with the eligible costs for the SR&ED program, it is critical that companies implement proper tracking systems to separate the costs.

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