SR&ED Program Is Having Its Moment: Budget 2026 Highlights
Recent budgets have expanded the SR&ED program so that its incentives count for more, not only for larger, profitable companies, but also for start-ups and growing businesses.
Highlights from Budget 2026: A $930 Million Expansion of SR&ED Commercialization
Budget 2026 expands SR&ED with a $930 million boost for commercialization. Two new areas of eligible costs matter most:
- Commercialization and regulatory work: tests, validations and studies needed for initial approval or certification.
- IP protection: registration and maintenance costs for IP developed through SR&ED work.
The changes apply to tax years beginning on or after November 5, 2026, so start tracking these costs now.
The following new activities are eligible when they are directly related to an SR&ED-eligible project.
1. Commercialization, Regulatory and Certification Requirements
Eligible activities include tests, technological validations, and studies conducted to meet the regulatory requirements for obtaining the initial approval or certification needed to commercialize a product or process.
Which costs qualify? As with other SR&ED costs:
- Salaries
- Materials
- Contracting costs
- Overhead costs
- Machinery and equipment
2. Intellectual Property Protection
Claimants often ask: if you are building intellectual property (IP), what about the costs of protecting it? Eligible expenditures now include the registration and maintenance of IP protection for IP developed while conducting SR&ED-eligible activities.
Which IP qualifies? IP registered or protected as patents, certificates of supplementary protection, rights, or copyrighted software, under the relevant Canadian legislation or equivalent legislation in another jurisdiction.
Which costs qualify?
Costs incurred to obtain and, where applicable, maintain protection for eligible IP, including:
- Preparing and filing IP protection applications, and supporting activities conducted in Canada
- Maintenance costs to retain IP rights
- Administrative fees payable within or outside Canada
What does not qualify?
Indirect costs not connected to securing and maintaining IP, such as:
- IP rights enforcement and litigation costs for infringement
- Disposal of IP, where recapture rules apply to SR&ED investment tax credits (ITCs) and deductions previously claimed
When Can You Start Claiming?
Right now: The changes apply to taxation years beginning on or after Budget Day, November 5, 2026.
Expected Impact
This is a significant step toward streamlining incentives for R&D commercialization & regulatory expenses and IP protection. It removes the burden of approaching three separate grant and incentive programs and waiting for approvals. If well executed, it will boost business and innovation investment within Canada.
What Claimants Should Do Now
- Start tracking the costs and activities described above.
- Watch for our upcoming guidance on tracking these costs, so you can take full advantage of the expanded benefits.
- Reach out to EVAMAX team with any questions.
Why This Matters
Including certain commercialization expenses under the SR&ED program gives builders and businesses doing cutting-edge research and development additional support as they turn their intellectual and technological capital into commercial-ready ventures.
Turning Innovation into Lasting Value
To fully realize the economic benefits of their new ideas, Canadian businesses must be able to translate their innovations into commercial success & retain the value they create
This requires a competitive, transparent, and coordinated approach to intellectual property, one that helps Canadian businesses and entrepreneurs retain and capitalize on their ideas right here at home.
Questions about what qualifies? Reach out to the EVAMAX team.