SR&ED for the Construction Engineering Industry: R&D Tax Credits and Incentives
Can Your Construction Engineering Projects Qualify for SR&ED?
Canada's construction engineering industry continues to advance through developments in structural engineering, advanced building materials, sustainable construction technologies, infrastructure systems and innovative construction methods. Construction companies, engineering firms, building material manufacturers and construction technology developers regularly encounter complex technical challenges as they work to improve structural performance, construction efficiency, durability, safety and sustainability.
Canada's Scientific Research and Experimental Development (SR&ED) tax incentive program provides tax incentives for eligible research and development activities undertaken to achieve scientific or technological advancements.
Construction engineering businesses developing new building technologies, experimenting with advanced materials or investigating unresolved structural, geotechnical or construction process challenges may qualify for SR&ED tax credits when their work meets the program's eligibility requirements.
What Type of Activities and Technological Challenges May Qualify?
- Structural engineering and building systems: Experimenting with new structural designs, connection systems or load-bearing components to overcome technical challenges involving strength, stability, deformation or structural performance.
- Advanced concrete and construction materials: Materials engineers and researchers developing or modifying concrete mixtures, cementitious materials, composites or other building materials to address unresolved challenges involving durability, strength, curing behaviour or environmental performance or conducting experimental testing, collecting data to evaluate structural, material or equipment performance.
- Geotechnical and foundation engineering: Investigating new foundation systems, soil stabilization methods or ground improvement technologies to overcome technical uncertainties involving soil behaviour, settlement, load distribution or structural stability.
- Prefabrication and modular construction: Manufacturing and process engineers investigating technical challenges involving development of new prefabricated components, modular building systems or assembly methods to overcome challenges involving structural integration, dimensional accuracy, connection performance or manufacturing consistency.
- Sustainable and energy-efficient construction technologies: Experimenting with new insulation systems, building envelopes, low-carbon materials or construction methods to overcome unresolved challenges involving thermal performance, durability or energy efficiency.
- Construction automation and robotics: Mechanical and automation engineers developing new robotic systems, automated equipment or sensor-based technologies to address technical limitations involving construction precision, equipment control or process reliability.
- Advanced construction manufacturing processes: Experimenting with 3D concrete printing, automated fabrication, forming or material processing methods to overcome challenges involving material behaviour, accuracy, consistency or scalability.
- Infrastructure and civil engineering technologies: Investigating new bridge components, pavement systems, drainage technologies or infrastructure materials to address unresolved technical challenges involving structural performance, durability or environmental exposure.
- Building envelope and environmental performance: Developing new roofing, façade, waterproofing or insulation technologies to overcome technical limitations involving moisture resistance, thermal behaviour, air leakage or long-term material performance.
- Software and control systems developers investigating new construction automation, monitoring or equipment control technologies.
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 Construction Engineering 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 construction 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 construction activities, standard engineering calculations, ordinary site investigations and regulatory compliance testing do not automatically qualify.
Dive deeperOther Funding Opportunities for Construction Engineering Businesses
Depending on the project, company, location and activities involved, additional funding may be available through federal, provincial and regional programs.
Potential sources may include:
NGen (Next Generation Manufacturing Canada):
Supports collaborative advanced manufacturing projects involving innovative production technologies, automation, robotics and smart manufacturing systems. Construction engineering businesses may benefit from opportunities supporting prefabrication, modular construction manufacturing, advanced material processing, automated fabrication and innovative building component production technologies.
Strategic Innovation Fund (SIF):
Provides potential support for eligible large-scale innovation, industrial transformation and business investment projects. Construction engineering and building technology companies undertaking significant investments in advanced manufacturing, low-carbon construction materials, innovative building technologies or strategic industrial capabilities may qualify under applicable funding opportunities.
Mitacs Accelerate:
Supports collaborative research internships connecting businesses with academic researchers to address scientific and technological challenges. Potential applications include structural engineering, advanced construction materials, geotechnical research, sustainable building technologies, construction automation and infrastructure innovation.
NRC IRAP (Industrial Research Assistance Program):
Provides expert advisory services and potential financial support to eligible Canadian small and medium-sized businesses developing innovative technologies, products and processes. Construction engineering businesses may qualify for assistance with advanced building materials, construction automation, structural technologies, innovative equipment development and technical R&D.
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.
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 helps businesses identify and pursue opportunities across SR&ED, tax incentives, grants and government funding programs.