For many founders, the path from a brilliant idea to a market-ready product is paved with high upfront costs and technical hurdles. For years, the Scientific Research and Experimental Development (SR&ED) tax incentive program has been the backbone of R&D funding in Canada, but as technology evolved, the industry called for the program to do the same.

In 2025, those calls were answered. With significant updates to thresholds, eligibility and the inclusion of capital expenditures, SR&ED is entering a new era. The 2025 updates restore eligibility for capital expenditures and increase claim thresholds for growing companies, making SR&ED more impactful for founders at every stage.

To break down what this means for founders and their teams, we sat down with Lauren Valliere, a Communitech Pro Squad member, co-founder and Managing Partner of GrowWise, a consulting firm using AI to simplify the SR&ED process.

A decade in the making

For founders in deep tech, manufacturing or biotech, the cost of physical assets has often been a barrier to entry. One of the most celebrated changes in the recent update is the return of capital expenditure eligibility, a move that signals a major shift in government priority.

“I think it's a really exciting change in terms of the direction the government is moving in,” said Valliere. “These changes have been asked for for over a decade or two. Bringing them back, I think, really shows that the Canadian government is focusing on supporting Canadian innovation and supporting Canadian businesses”.

For companies building physical products, the change in policy will have important capital implications. 

“It allows those costly capital assets to be eligible under the SR&ED program, which can be millions of dollars back for companies”.

Scaling within borders

While the inclusion of capital costs helps those with heavy machinery, the increase in expenditure thresholds is designed to help scale-ups keep their momentum. 

As companies grow from 20 to 100 employees, their R&D costs increase significantly. The updated thresholds allow these scaling companies to claim more SR&ED credits, giving founders a stronger reason to keep their teams and operations in Canada.

“I think these changes are really positive for the KW tech ecosystem,” Valliere notes. “Knowing that they're available will really encourage folks to stay local and stay in Canada as they grow and scale”.

Simplifying R&D with AI

Founders are increasingly using AI to tackle complex technical challenges, but many still get bogged down by administrative work, especially when it comes to filing SR&ED claims. Tracking eligible projects, documenting costs and navigating nuanced rules can take time away from product development and scaling teams.

This is where Lauren Valliere and her firm, GrowWise, come in. By leveraging their AI-driven platform, they help founders streamline the SR&ED process, maximizing claims while minimizing the administrative burden.

“We've built an AI-driven platform to address these challenges and to simplify the process from the client perspective,” said Valliere. “We're focused on saving time for founders, saving time for technical teams and creating this SR&ED claim with as little lift for our clients as possible”.

Practical steps for founders

So, how should a startup or scale-up prepare for these 2025 changes? Valliere emphasizes that the "devils in the detail". Her advice is simple: don't wait until the end of the fiscal year to think about your documentation.

  • Talk to an expert early. Don’t wait — understand how SR&ED and the 2025 changes apply to your business.

  • Check your documentation. Accurate and thorough records can maximize your claim.

  • Use refunds strategically. When your cash refund arrives, reinvest it in technical staff or new projects to accelerate growth.

Building the Future Together

As part of the Communitech Pro Squad, Valliere and the GrowWise team are dedicated to helping the local ecosystem thrive. By aligning SR&ED claims with the new reality of AI-augmented work, Canadian companies can stay competitive, equitable and ready for the future.

“The founders that we've connected with through Communitech ProSquad are phenomenal and really focusing on some incredible innovations,” Valliere says. “It's great to be a part of this community”.

SR&ED is just one piece of building and scaling a tech business in Canada. If you’re looking for trusted advice, hands-on support or connections within the local ecosystem, reach out to the Communitech community.