The Exchange for Entrepreneurs Podcast

Unlocking SR&ED for Public Companies | The CSE Podcast E10-S5

The Exchange for Entrepreneurs Podcast

•May 26, 2026•26 min

The Exchange for Entrepreneurs Podcast•May 26, 2026

Why It Matters

By unlocking refundable SR&ED credits for public companies, the policy removes a longstanding financing barrier, enabling Canadian innovators to access significant cash without diluting equity. This could accelerate development of critical technologies—like clean‑energy mining and biotech—strengthen Canada’s competitive edge, and support a more vibrant public‑market ecosystem for high‑growth firms.

Key Takeaways

•Refundable SR&ED credit now available to Canadian public companies
•Refundable SR&ED rate increased for public companies
•Expense cap raised to $6 M CAD (~$4.4 M USD)
•Capital equipment now eligible, yielding up to 40% credit
•Financing firms can front‑load refunds, easing cash flow

Pulse Analysis

The Budget Implementation Act, often called C15, received royal assent on March 26, 2024 and became effective retroactively from December 16, 2024. This amendment rewrites the Income Tax Act to extend Canada’s refundable SR&ED (Scientific Research & Experimental Development) credit—traditionally reserved for Canadian‑controlled private companies—to publicly listed firms. By removing the historic penalty that stripped public companies of refundable benefits, the legislation creates a new avenue for capital‑intensive, pre‑revenue tech ventures to tap a federal incentive that can return millions of dollars each year.

Financially, the changes are significant. The refundable rate for eligible R&D work has been increased, and the annual expense ceiling has doubled from $3 M CAD to $6 M CAD (about $4.4 M USD). Capital equipment now qualifies for a 40% credit, expanding the pool of claimable costs beyond salaries to include specialized test rigs, clean rooms, and other hard‑tech assets. The federal budget estimates the program will handle roughly $4.5 B CAD (~$3.3 B USD) in claims, with the revised cap expected to generate about $1.5 B CAD (~$1.1 B USD) in refunds annually. Lenders are already structuring SR&ED‑backed financing, allowing companies to receive cash advances on anticipated refunds and smooth cash‑flow gaps that can span 12‑18 months.

For companies ready to claim, eligibility hinges on genuine experimental uncertainty and work performed within Canada. Eligible expenses include salaries of engineers, scientists, and contractors, plus capital assets used exclusively for the R&D hypothesis. Robust documentation—detailed timesheets, project logs, and contracts stipulating Canadian‑based work—is essential to satisfy CRA audits. Engaging experienced SR&ED consultants can streamline claim preparation and financing negotiations, while also ensuring public‑market disclosures remain transparent. By leveraging these new credits, Canadian public tech firms can extend their runway, reduce dilution, and keep innovative projects—and the associated IP—on Canadian soil.

Episode Description

🎙️ Our latest CSE Podcast episode is live - and this one tackles a major policy shift with real implications for Canadian public companies.

Host James Black sits down with Bryan Watson, Managing Director at CleanTech North, to break down recent changes under the Budget Implementation Act (C15) - and what they mean for innovation funding in Canada.

💡 Spotlight topic: Unlocking SR&ED tax credits for public companies

For decades, refundable SR&ED tax credits have primarily benefited private companies - but new legislation changes that. Public companies can now access the same non-dilutive funding mechanisms, creating meaningful runway for innovation across sectors.

⏱️ Timestamps:

00:00 Introduction & overview of C15

02:00 What changed in SR&ED eligibility

03:50 Why this matters for public companies

05:15 Non-dilutive funding & runway benefits

06:25 $6M expenditure threshold explained

07:20 What qualifies as SR&ED activity

09:50 Industries that can benefit (tech, mining, biotech)

13:30 Eligible expenses: salaries vs. capital

14:55 Financing SR&ED receivables

19:05 Documentation & audit considerations

23:10 Final thoughts & key takeaways

💬 “Why should we penalize companies based on their source of capital?” - Bryan Watson

With billions allocated annually and new accessibility for public issuers, this shift has the potential to reshape how Canadian innovation is funded - particularly in tech, biotech, and resource development.

#AlwaysInvested

#CSEPodcast #SRandED #Innovation #PublicMarkets #SmallCap #Tech #Mining #CleanTech #CapitalMarkets #CSEListed

🔴 Subscribe for more great CSE insights and interviews here: https://go.thecse.com/CSETV-Subscribe

STAY CONNECTED WITH THE CSE

=============================

📧 - NEWSLETTER: https://go.thecse.com/CSE-Mailing-List-Subscribe

🎧 - PODCAST: https://blog.thecse.com/cse-podcasts/

📸 - INSTAGRAM: https://www.instagram.com/canadianexchange/

🤝 - LINKEDIN: https://ca.linkedin.com/company/canadian-securities-exchange

👥 - FACEBOOK: https://www.facebook.com/CanadianSecuritiesExchange/

🐦 - TWITTER: https://twitter.com/CSE_News

📝 - BLOG: https://blog.thecse.com/

🖥 - WEBSITE: https://thecse.com/

📖 - MAGAZINE: https://issuu.com/thecse/docs