Canada: Overview | Research Credit Integrity Alliance

At a glance

Scheme: SR&ED deduction and investment tax credit under sections 37 and 127 of the Income Tax Act, claimed on Form T661.
Tax authority: The Canada Revenue Agency (CRA) administers the federal SR&ED tax incentives.
Claim notification: No advance notice is required; optional pre-claim approval has been open to eligible businesses since April 1, 2026.
Rules on adviser fees: No federal cap or ban on contingency fees was found; the billing arrangement must be reported on Form T661.
Preparer identification: Part 9 of Form T661 names each paid claim preparer, with business number, billing arrangement and total fee.
Professional body rules: The CPA Ontario code bars contingent fees for preparing an income tax return and allows them for other work with written client agreement.

Canada supports business research through the federal Scientific Research and Experimental Development (SR&ED) tax incentives. This page summarizes how a claim is made, what the official sources say about the advisers who prepare claims and how they may be paid, and the questions those sources leave open. Each topic has its own page, listed below, and every source is collected on the Canada sources page.

The incentives and who runs them

The SR&ED tax incentives are administered by the Canada Revenue Agency (CRA). The CRA describes them as intended to encourage businesses to conduct research and development in Canada.1 Corporations, individuals, trusts and partnerships that carry out SR&ED work in Canada may claim a deduction against income and earn an investment tax credit (ITC).2 The CRA states that the basic ITC rate is 15 percent, that some corporations may claim an enhanced rate of 35 percent, and that some businesses may earn a refundable ITC.2

The deduction is provided by section 37 of the Income Tax Act and the credit by section 127.34 The Act defines SR&ED as systematic investigation or search carried out in a field of science or technology by means of experiment or analysis, and lists work that is excluded, such as market research, routine testing and style changes.5

A claim is made on Form T661, filed with the income tax return.6 Section 37 requires the prescribed form to be filed no later than 12 months after the taxpayer's filing-due date for the year, and to contain both prescribed information about the expenditure and claim preparer information.3 The CRA explains that this gives corporations 18 months, and individuals 17.5 months, from the end of the tax year to file a claim.7

How advisers are paid

The official sources show that claim preparers in Canada are paid in several ways. Form T661 lists five billing arrangement codes: a contingency fee arrangement, where the fee is based on a percentage of the investment tax credit earned; an hourly rate; a daily rate; a flat fee; and other arrangements.6 The CRA's guide to the form includes a worked example of a contingency fee charged as a percentage of the ITC.7

In Budget 2012 the federal government said a study would be conducted to better understand the practice of businesses hiring consultants on a contingency fee basis, and that the Department of Finance would accept input until October 1, 2012.8 The measure that followed, in Budget 2013, required claims to report each preparer's billing arrangements, including whether contingency fees were used, and introduced a penalty for missing, incomplete or inaccurate preparer information.9

What the rules say

No federal statute or CRA rule identified for this page caps or prohibits contingency fees for preparing an SR&ED claim.103 The rules instead require disclosure. A claim preparer is a person or partnership who agrees to accept consideration to prepare, or assist in preparing, the SR&ED form, but not an employee doing so as part of their job.10 Claim preparer information means prescribed information on the preparer's identity and on the arrangement under which the preparer agrees to accept consideration.10

A false statement or omission in that information carries a penalty of $1,000, for which the person who makes it and any claim preparer are jointly and severally, or solidarily, liable.10 A claim preparer is not liable if it exercised the care, diligence and skill that a reasonably prudent person would have exercised in comparable circumstances.10 The fee rules and contingency fees in SR&ED pages set out the detail.

Professional body rules

The CPA Ontario code was adopted by the Council of CPA Ontario and is continued under the Chartered Professional Accountants of Ontario Act, 2017.11 The CPA Code of Professional Conduct published by CPA Ontario says a member or firm in public accounting shall not offer or perform a professional service for a contingent fee where the service is an engagement requiring independence, a compilation engagement, or the preparation of an income tax return.11 For other services, a contingent fee is permitted if the client has agreed in writing to the basis for the fee before the engagement is substantially complete, subject to conditions on objectivity.11 CPA British Columbia describes the same rule.12 The code does not say whether preparing an SR&ED claim counts as preparing an income tax return.11 See professional body rules.

Preparer identification

Part 9 of Form T661 asks whether a claim preparer was engaged in any aspect of the claim. If one was, the claimant gives each preparer's name, business number, billing arrangement code, billing rate, any other billing arrangement and the total fee paid, payable or expected to be paid.6 Whether or not a preparer was engaged, the individual, authorized signing officer or authorized partner must certify that the information is complete and accurate.67 See preparer identification and Form T661 claim preparer details.

Claim notification and pre-claim approval

The Income Tax Act sets a filing deadline for the claim but no requirement to notify the CRA in advance.3 Since April 1, 2026, eligible businesses can use an optional pre-claim approval process to have planned projects assessed before work begins.13 See pre-claim approval.

Reviews, penalties and disputes

The CRA states that all SR&ED claims undergo a risk assessment, and that a review is carried out by a research and technology advisor and a financial reviewer.14 A corporation that disagrees with an assessment may file a notice of objection within 90 days and may then appeal to the Tax Court of Canada.1516 See reviews and audits, penalties and disputes and appeals.

Open questions

Whether any federal or provincial rule outside the Income Tax Act restricts how SR&ED claim preparers are paid.
Whether the CPA code's bar on contingent fees for preparing an income tax return extends to preparing Form T661. The code does not address the point.11
Whether the CRA has published aggregate data from Part 9 on how preparers are paid. None was identified in the sources reviewed for this page.
Whether anyone who prepares SR&ED claims for a fee must hold a license or register. No such requirement was identified; see adviser registration.

Sources

Canada Revenue Agency, Scientific Research and Experimental Development (SR&ED) tax incentives, program page. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program.html (accessed 11 October 2026). Back
Canada Revenue Agency, What are SR&ED tax incentives, sections on the deduction and the investment tax credit. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/what-are-sred-tax-incentives.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), section 37, subsections 37(1), (11), (11.1) and (12). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-37.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), section 127, subsection 127(9), definition of "investment tax credit", paragraph (m). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-127.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsection 248(1), definition of "scientific research and experimental development". https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-248.html (accessed 11 October 2026). Back
Canada Revenue Agency, Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, T661 E (26), page 1 and Part 9, Claim preparer information, lines 935 to 975 and billing arrangement codes. https://www.canada.ca/content/dam/cra-arc/formspubs/pbg/t661/t661-26e.pdf (accessed 11 October 2026). Back
Canada Revenue Agency, T4088, Guide to Form T661 (T4088(E) Rev. 20), sections on the SR&ED reporting deadline and Part 9, Claim preparer information. https://www.canada.ca/en/revenue-agency/services/forms-publications/publications/t4088/guide-form-t661-scientific-research-experimental-development-expenditures-claim-guide-form-t661.html (accessed 11 October 2026). Back
Canada Revenue Agency, Archived: Budget 2012, Scientific Research and Experimental Development Program, question 9. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/archived-budget-2012/archived-budget-2012-scientific-research-experimental-development-program.html (accessed 11 October 2026). Back
Canada Revenue Agency, Budget 2013, Scientific Research and Experimental Development (SR&ED) Tax Incentive Program, section on claim preparer information and penalty. https://www.canada.ca/en/revenue-agency/programs/about-canada-revenue-agency-cra/federal-government-budgets/budget-2013/budget-2013-scientific-research-experimental-development-tax-incentive-program.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsections 162(5.1), (5.2) and (5.3). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-162.html (accessed 11 October 2026). Back
Chartered Professional Accountants of Ontario, CPA Code of Professional Conduct, Rule 215, Contingent fees (Rules 215.1 and 215.2 and Guidance), and Definitions, "contingent fee". https://assets.cpaontario.ca/members/regulations-guidance/pdfs/CPA-Ontario-Code-of-professional-conduct.pdf (accessed 11 October 2026). Back
Chartered Professional Accountants of British Columbia, Avoiding complaints about fees, CPABC Code of Conduct guidance (last revision 1 March 2018). https://www.bccpa.ca/kbase/kbase-search/cpabc/cpabc-code-of-conduct/guidance/avoiding-complaints-about-fees/ (accessed 11 October 2026). Back
Canada Revenue Agency, Innovate with confidence: CRA's SR&ED Tax Incentive Program launches a new Pre-claim approval process (April 8, 2026). https://www.canada.ca/en/revenue-agency/news/newsroom/tax-tips/tax-tips-2026/innovate-confidence-cra-sred-tax-incentive-program-pre-claim-approval-process.html (accessed 11 October 2026). Back
Canada Revenue Agency, The SR&ED Review Process: A Guide for Claimants, sections on selection for review and who conducts reviews. https://www.canada.ca/en/revenue-agency/services/scientific-research-experimental-development-tax-incentive-program/technical-review-a-guide-claimants.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsection 165(1). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-165.html (accessed 11 October 2026). Back
Government of Canada, Income Tax Act, RSC 1985, c 1 (5th Supp), subsection 169(1). https://laws-lois.justice.gc.ca/eng/acts/I-3.3/section-169.html (accessed 11 October 2026). Back