What's Happening?
The Canadian mining technology sector is set to benefit from significant changes to the Scientific Research and Experimental Development (SR&ED) program in 2026. These changes are designed to support the capital-intensive and engineering-driven nature
of the industry. Key updates include an increase in the annual expenditure limit for the enhanced 35% refundable tax credit from $3 million to $6 million, allowing companies to recover up to $2.1 million annually. Additionally, capital expenditures are now eligible for tax credits after an 11-year hiatus, enabling firms to claim credits on specialized equipment and machinery. The Canada Revenue Agency (CRA) has also introduced a 90-day Pre-claim approval process, reducing the traditional review cycle from 180 days. These measures aim to provide financial certainty and encourage innovation in the mining technology sector.
Why It's Important?
These updates to the SR&ED program are crucial for the mining technology sector, which requires substantial investment in research and development. By increasing the expenditure limit and reintroducing capital expenditure eligibility, the program provides significant financial relief to companies engaged in high-cost, long-term projects. This is expected to stimulate innovation and competitiveness within the industry. The faster approval process will also enhance cash flow management, allowing companies to plan and execute projects with greater confidence. Overall, these changes are likely to drive technological advancements and economic growth in the Canadian mining sector.
What's Next?
As the new measures take effect, mining technology companies are expected to reassess their funding strategies to maximize the benefits of the updated SR&ED program. Firms operating in Québec have the additional advantage of leveraging the provincial Tax Credit for Research, Innovation, and Commercialization (CRIC), which offers a refundable incentive of up to 30%. This dual opportunity allows companies to optimize their R&D and commercialization efforts. Moving forward, companies will need to navigate the new limits and AI-enhanced CRA risk assessments, requiring proactive planning and strategic alignment of their projects with the available incentives.
