SR&ED Updates: Budget 2025 Changes Make Your Next Opportunity

Date: June 17, 2026
Category: Policy & Budget Updates

If your company invests in product development, process improvement, software, manufacturing, or technical problem-solving, Budget 2025 could significantly increase the SR&ED cash you recover. For many Canadian-controlled private corporations (CCPCs), the latest changes effectively double the ceiling for enhanced refundable federal credits, creating a major opportunity to improve cash flow and reinvest in growth.

What Budget 2025 Changed

The federal expenditure limit for the 35% enhanced SR&ED credit increased from $3 million to $6 million in eligible expenditures.

For qualifying CCPCs, that can increase the maximum refundable federal credit from approximately $1.05 million to $2.1 million annually.

Certain public corporations with modest revenues may now also access the enhanced rate on part of their eligible SR&ED spending, rather than being limited to the 15% base credit.

When combined with provincial SR&ED incentives, many Canadian businesses may now recover a meaningful share of eligible expenditures. For companies scaling technical work, this can translate into stronger cash flow, faster reinvestment, and more confidence in funding future innovation.

Who Should Pay Attention

Technology companies building new software, platforms, or infrastructure while managing rapid growth./li>

Manufacturers, processors, and engineering-driven businesses running multiple technical improvement initiatives at once.

Emerging public and mid-market companies looking to unlock more non-dilutive funding from their existing R&D efforts.

What Your Business Should Do Next

Reassess your expected SR&ED claim if your eligible expenditures are above $3 million, your potential refund may be significantly higher than in prior years.

Confirm whether your ownership structure, associated corporations, and revenue profile allow you to access the enhanced refundable rates.

Review your current and upcoming technical projects to determine where stronger SR&ED support could improve investment decisions and reduce funding pressure.

Budget 2025 has created a valuable opportunity for innovative Canadian businesses—but capturing the full benefit depends on proper eligibility analysis, claim strategy, and documentation. If your company is investing in technical work, now is the right time to assess whether you could recover more through SR&ED.

Not sure how much your business could recover? Carnegie Capital Group help Canadian companies identify eligible work, quantify the opportunity, and prepare defensible SR&ED claims without creating unnecessary administrative burden for internal teams. If you want to understand how these new rules may affect your business, let’s talk.