Funding & finance
SR&ED: an opportunity for Atlantic Canadian energy innovators
Research and development incentives can help Atlantic Canadian businesses advance storage, microgrids, heat pumps and energy software.
Originally published on LinkedIn. This article reflects the information and perspective at the time of the original post.
The SR&ED (Scientific Research & Experimental Development) Investment Tax Credit, valued at $4 billion annually, is a major funding opportunity for businesses in Atlantic Canada working in energy efficiency, renewables and distributed energy solutions.
With the recent passage of Bill C-15, SR&ED eligibility for capital expenditures has been restored after being excluded since 2014. Eligible R&D equipment, test rigs and pilot facilities may now qualify, subject to the program’s requirements. Bill C-15 received Royal Assent on March 26, 2026. Eligible SR&ED capital expenditures made after December 15, 2024, can be claimed.
Uptake of SR&ED in Atlantic Canada has been low. While the region represents roughly 6% of Canada’s population, it receives less than 2% of total SR&ED support.
This reflects a broader issue: Atlantic Canada continues to lag behind the rest of the country in business enterprise R&D spending. In 2023, business R&D spending in the region was $267 per person compared to a national average of $872, about 69% lower. All four Atlantic provinces rank in the bottom half nationally, with New Brunswick last at $193.
At the same time, Atlantic Canada has a strong base of companies working on distributed energy and energy efficiency, including storage, microgrids, heat pumps, and energy software.
There is a real opportunity here to increase R&D activity and make better use of SR&ED to support it.
CRA program update: https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/sred-updates.html (opens in a new tab)
