SR&ED for the Food & Beverage Industry: R&D Tax Credits and Incentives
Can Your Food & Beverage Projects Qualify for SR&ED?
Food and beverage businesses continually work to improve product quality, develop new formulations, increase production efficiency and address technical challenges. When these activities involve resolving technological uncertainties through systematic investigation or experimentation, they may qualify for Canada's Scientific Research and Experimental Development (SR&ED) tax incentive program.
EVAMAX helps food and beverage manufacturers, processors and other businesses assess their research and development activities and identify potential tax credits, grants and funding opportunities.
Examples of Potential SR&ED Activities
- Production line and process improvements to address unresolved technical limitations in food and beverage manufacturing.
- Product and formulation development trials to investigate new ingredients, recipes, processing methods or product characteristics.
- Shelf-life and product stability investigations to overcome challenges with preservation, consistency, spoilage or storage conditions.
- Chemical compatibility and formulation challenges involving ingredients, additives, preservatives, emulsifiers or other components.
- Sensory property improvements involving taste, texture, colour, aroma or mouthfeel when technical uncertainties require experimentation.
- Development or modification of processing systems, including novel catalyst or buffer systems where applicable.
- Experimental work in organic or inorganic chemistry to investigate material interactions, chemical reactions or product performance.
- Scale-up and production consistency challenges when laboratory-developed products or processes do not perform as expected at commercial production volumes.
The key question is whether your business is working to overcome a technological challenge that could not be readily resolved using existing knowledge or standard practices.
What Food & Beverage costs may qualify for SR&ED?
Once a project has been identified as potentially eligible for SR&ED, the next step is determining which expenditures are associated with the eligible R&D work. Depending on the nature of the project, potentially qualifying expenditures can include employee labour, materials, contractors, specialized equipment and certain lease or capital expenditures.
Labour
Materials
Contractors and Specialized Services
Lease and Capital Expenditures
Recent changes to the SR&ED program have made certain qualifying capital expenditures incurred after December 15, 2024, eligible for SR&ED.
If your project involves these types of activities and costs, it may be worth assessing whether the work and associated expenditures qualify for SR&ED.
Not every food sciences project, engineering design, material modification or equipment upgrade qualifies for SR&ED. Eligible work must involve scientific or technological uncertainty, a systematic investigation or search through experiment or analysis, and an attempt to achieve scientific or technological advancement. Routine lab activities, standard engineering calculations, ordinary site investigations and regulatory compliance testing do not automatically qualify.
Dive deeperOther Funding Opportunities for Food & Beverage Businesses
Other forms of government funding for food & beverage businesses are available too. Depending on the project, company, location and activities involved, additional funding may be available through federal, provincial and regional programs.
Potential sources may include:
AgriInnovate Program:
Dedicated federal funding targeted at commercializing, demonstrating, or adopting innovative, market-ready technologies and processes that enhance agricultural productivity, competitiveness, and sustainability.
AgriMarketing Program:
This program aims to increase and diversify exports to global markets through industry-led promotional activities to differentiate Canadian products and producers, by leveraging Canada's reputation for high-quality and safe food. The program funds a wide range of agricultural sectors, including food and beverage, fish and seafood, horticulture etc.
NRC IRAP (Industrial Research Assistance Program):
Provides expert advisory services and non-repayable contributions or wage subsidies to help AgTech companies accelerate technical R&D, optimize prototypes, and scale innovations.
SCALE AI Supercluster & Protein Industries Canada Supercluster:
High-impact funding streams designed for businesses leveraging artificial intelligence, supply chain optimization, or advanced plant-protein innovation and food processing.
Mitacs (Accelerate & Elevate):
Co-funded research internships that allow food processors, agricultural and AgTech firms to embed top-tier Master's, PhD, and postdoctoral scientific talent directly into their R&D pipelines—covering soil science, agronomy, or data modeling—at a fraction of the cost.
NGen (Next Generation Manufacturing Canada):
Supports collaborative advanced manufacturing projects involving innovative production technologies, automation, robotics and smart manufacturing systems that can improve productivity, efficiency and competitiveness in food and beverage processing.
Additional federal, provincial and regional programs may also be available depending on the company's location and project objectives.
Government funding programs change frequently. Eligibility, application windows and available funding should be reviewed based on the specific project and timing. Funding programs also have specific eligibility requirements, application periods and eligible-cost rules. In some cases, SR&ED and government funding may interact, so businesses should consider their available incentives when planning and documenting a project.
How EVAMAX Can Help
Navigating Canada's tax incentives and grants can be complex. A single project may involve R&D activities, capital investment, manufacturing, commercialization and expansion, each of which may have different eligibility requirements.
EVAMAX can help you assess your project and identify the SR&ED, tax credit, grant and funding opportunities that may be available to your business.