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All innovative companies require a non-dilutive capital strategy. Healthtech ventures that tend to have a longer road to commercialization can benefit greatly from taking advantage of these government incentives. But exploring and executing on this type of funding can feel overwhelming, particularly as the landscape is constantly changing.
Here’s a quick guide on how to navigate the largest tax credit incentive for Canadian R&D.
If you haven’t investigated SR&ED this year, you could be leaving the equivalent of a Seed extension on the table.
1. Timing of 2024 and 2025 claims
For companies with a December 31 fiscal year-end, the deadline to claim for 2024 is June 30, 2026, meaning there is still time to claim two years of SR&ED. For example, a company with $1M ARR, a typical healthtech company’s spending on salaries often yields a $250K - $500K cash refund per year assuming no taxes payable.
2. Increased cap and capital expenditure costs
The proposed changes under Bill C-15, anticipated in 2026, would allow companies to claim double the expenditure limit, an increase from $3M to $6M. A typical Series B firm with a $5M R&D budget could see a federal refund increase from $1.3M to $1.75M. Additionally, capital expenditure for property acquired after 2024 is now also eligible. This means any medical hardware, lab equipment, or dedicated server infrastructure may be eligible for a partial refund.
The most important reason to chase a claim would be the large refund, but SR&ED is one of very few programs that exist to reward you even if your project fails. In healthtech where clinical hypotheses could fall flat, it provides a safety net without draining your bank.
3. Why go through the effort of a SR&ED claim?
The most important reason to chase a claim would be the large refund, but SR&ED is one of very few programs that exist to reward you even if your project fails. In healthtech where clinical hypotheses could fall flat, it provides a safety net without draining your bank. Additionally, professional investors and granting agencies view a consistent SR&ED history as a validated R&D pipeline. It proves your team is doing novel work and not just reskinning existing APIs.
4. How do I know what qualifies for SR&ED?
Review the projects your team did over 2024 and 2025. Did they solve for technological uncertainty? Did you learn new things? Was there a process wherein you had a hypothesis followed by testing and documentation? If you answered yes to these, you may have a claim.
If you’re ready to explore SR&ED with a skilled team of trusted experts, reach out to me here and we’ll get you started.
