Research & Development Tax Credit in Ontario

General Manufacturing

The Research & Development tax credits are deep-rooted within the manufacturing industry in Canada. The manufacturing industry is facing reduced profit margins due to the current economic conditions. However, given the competitive nature of the industry, leaders are constantly looking for new ways to improve efficiency and provide better products for their customers. Innovation through experimentation, testing, and constant reiteration are essential for companies to stay competitive and maintain profitability by keeping overall production cost low, while developing cutting-edge technology.

Top manufacturing sectors that qualify for the R&D tax credits are:

  • Food & Beverage
  • Tool & Die
  • Automotive
  • Pulp & Paper
  • Foundries
  • Metal Fabrication
  • Welding
  • Injection Molding
  • Plastics & Resins
  • Aerospace

The R&D tax credits have become integral to the overall process because they help firms forecast their risk assessment by incorporating returns (on investment) with the SR&ED recoveries. Through a process of systematic R&D, manufacturers are able to achieve enhancements to products, processes, materials and systems. These activities qualify for tax credits or cash refunds through the Scientific Research and Experimental Development (SR&ED) program. At SRJCA, we specialize in helping manufacturers maximize their SR&ED claims by uncovering activities that qualify:

  • Product/equipment integration into existing resources
  • Upgrading/downgrading software/IT systems
  • Improvements to products/procedures to increase quality/quantity
  • Custom products that require non routine engineering
  • Waste reduction, cost control, product line improvements, etc.

The Research & Development tax credit is the single most generous tax incentive by the Canada Revenue Agency (CRA). Manufacturing companies that benefit from the SR&ED program recover significant amount of qualified expenditures. Many companies may experience vagueness and difficulty in understanding the CRA requirements and policies surrounding the R&D tax incentives. As a result of this, it is quite common for companies to encounter challenges in identifying and claiming the appropriate activities/expenditures, leading to under claiming what they may be entitled to. At SRJCA, our clients are assigned to specialized and experienced consultants in the same field as the client’s industry. Our consultants are skilled in identifying unclear, commonly missed, vague, and under claimed activities, which leads to recovering fair entitlement of R&D credits.

The Ontario R&D tax credits are quite lucrative for manufacturing firms, as they assist firms to recover up to 71% of qualified expenditures (payroll, capital, contract expenditures etc). The recovery through R&D tax credits ranges from 20% – 80% of qualified expenditures, depending upon the province of residence and type of claimable expenditures.

At SRJCA, our objective is to identify all facets of qualified technical activities and corresponding expenditures, leading to a successful SR&ED claim completion. Whether you are a start-up corporation or experienced in filing SR&ED claims, our experienced, professional consultants will minimize any disruption from your business daily operations. We have a proven track-record of delivering quality results and have a strong reputation with CRA.