Why Bill C-15 is the adrenaline shot Canadian innovation needs

The Scientific Research and Experimental Development (SR&ED) program has long been the backbone of Canadian R&D, but let’s be honest: it was starting to feel a bit dusty. While our tech and manufacturing sectors were sprinting into the future, the tax code was still laced with 2014-era restrictions. That changed on 26 March 2026, when Bill C-15 officially received Royal Assent. This isn’t just a minor paperwork update; it’s a fundamental shift in how the federal government fuels local ambition. We’re talking doubled expenditure limits, the return of capital equipment claims and a massive olive branch to public companies.

Ready to see how these changes can fuel your next breakthrough? Explore our SR&ED solutions to find out how we help you navigate the new rules.

The $6 million upgrade for SMBs

For years, the “magic number” for Canadian-controlled private corporations (CCPCs) was $3 million. That was the ceiling for the 35% refundable tax credit. If you spent more than that on R&D, your rate for the excess dropped significantly. Bill C-15 has effectively smashed that ceiling, doubling the annual expenditure limit to $6 million.

What does this mean in plain English? It means a single qualifying SMB can now pocket up to $2.1 million in refundable credits annually. As Bryan Watson noted in BetaKit, this enhances a founder’s ability to access more “cash back” credits in later stages of growth, regardless of their source of capital. For a scaling startup or a mid-sized manufacturer, that is a massive win for your capital stack.

Public companies finally get a seat at the table

Historically, the SR&ED program felt a bit “us vs. them.” If you were a private CCPC, you got the juicy 35% refundable credit. If you went public or had significant foreign investment, you were often relegated to a 15% non-refundable credit. Bill C-15 has finally started to bridge that gap.

Certain eligible Canadian public corporations (ECPCs) are now brought within the scope of the 35% refundable credit, subject to a phase-out based on average gross revenue. It’s a massive win for the Canadian capital markets, encouraging companies to stay and grow in Canada rather than fleeing to US exchanges the moment they hit a certain valuation. If you’re trying to wrap your head around how this fits into the broader innovation landscape, understanding the SR&ED program is the best place to start.

You can claim “stuff” again

Since 2014, the SR&ED program has been almost exclusively about “brains” — salaries, wages and materials. If you needed a specialized $500,000 piece of machinery to test a new alloy, you were largely on your own.

Bill C-15 restores eligible SR&ED capital expenditures to both the deduction and investment tax credit framework. For property acquired or lease costs incurred on or after 16 December 2024, you can once again include these in your claim. Whether it’s specialized lab equipment or prototyping tools, the government is once again helping you pay for the physical tools of innovation.

Fewer  “tax cliffs,” more runway as you scale

Scaling a business in Canada used to come with a built-in “success penalty.” Once your taxable capital hit $10 million, your access to the enhanced 35% credit started to disappear quickly. Bill C-15 smooths that curve.

The new phase-out range now stretches from $15 million to $75 million, giving SMBs far more room to grow before their access to enhanced credits is significantly reduced. The incentive hasn’t disappeared — but it now tapers more gradually, rather than dropping off a cliff.

Even better, CCPCs now have the option to base their phase-out on either prior-year taxable capital or average annual gross revenue over the preceding three fiscal years. This is a major unlock for capital-intensive startups that may be well-funded but pre-revenue, allowing them to retain access to meaningful support during critical growth phases.

Administrative streamlining: Faster, not just bigger

Alongside the legislative changes introduced in Bill C-15, the federal government has also signalled a push to modernize how SR&ED claims are processed. In Budget 2025, the government outlined its intention for the CRA to introduce an elective pre-claim approval process. This would allow companies to seek upfront confirmation that a project qualifies before incurring costs — a significant shift from today’s retrospective model.

For claims that go through this pathway and still require review, the CRA has indicated a target of reducing processing times to as little as 90 days, down from the typical 180. It’s important to note: these changes are administrative commitments, not legislated elements of Bill C-15. But if implemented as described, they would mark a meaningful improvement in speed and predictability for claimants.

This is where your internal processes matter. To benefit from a more streamlined system, you need clean, evidence-driven data. By integrating payroll, time tracking and project data, platforms like Employment Hero help ensure your claims are structured, defensible and ready for faster review.

The retroactive goldmine (and the CRA tidal wave)

Here’s the part most people are missing: because many of these changes apply to taxation years beginning on or after 16 December 2024, you may already be eligible for additional benefits.

As Bryan Watson noted in BetaKit, companies should revisit prior claims and spending to determine whether amended filings could unlock additional value under the new rules. 

However, expectations need to be managed. The CRA is likely to face a significant influx of amended claims as these updates take effect, which could impact processing timelines in the near term. For employers looking to bridge that timing gap, Employment Hero can also connect them with SR&ED financing at attractive rates, helping support cash flow while claims are being processed.

Why this matters for your people

At the end of the day, R&D isn’t just about spreadsheets; it’s about the people doing the work. The expanded SR&ED credits directly subsidize your payroll, making it easier to attract and retain top-tier talent. When you can recover 35% of your technical salaries, you can afford to pay the competitive wages that keep our best and brightest in the country.

This is where having a unified employment platform becomes your secret weapon. Tracking every hour spent on “experimental development” vs. “routine maintenance” is the bane of every CTO’s existence. When your HR, payroll and time-tracking data live in one place, you meet the CRA’s new streamlining requirements with zero extra labour.

Stop leaving money on the table

Bill C-15 is the most significant update to the Canadian innovation landscape in decades. The government has essentially handed employers a much bigger shovel to dig for innovation. The question is: are you ready to use it?

Whether you’re a three-person startup or a recently-listed public company, the new rules are designed to keep you innovating on Canadian soil. Don’t let the complexity of the tax code stop you from claiming what’s yours.

Ready to maximize your R&D return?
The new SR&ED rules are live, and the clock is ticking on your next filing period. Let us help you manage the people, the payroll and the paperwork that makes your claim possible.