How Canadian founders can rethink R&D tax credits to fuel smarter growth strategies

Innovative companies building IP-driven technologies often leave one powerful funding stream untapped: Canada's SR&ED tax credit program. Whether you're deep in AI, building SaaS, or launching your next medtech breakthrough, there's a way to get back up to 64% of your eligible development costs without giving up equity.

Boast recently hosted a live webinar, "Unlock Hidden Funding: Debunking SR&ED Myths for IP-Driven Companies," where we cleared up what founders get wrong about SR&ED, how IP and tax incentives can play together, and what funding programs exist to build long-term value.

Here's what you need to know.

What's the Core Problem?

IP-focused startups often assume their patent-related costs are eligible for SR&ED, or worse, skip the program entirely because they think R&D means having a lab coat.

That's a missed opportunity.

SR&ED (Scientific Research & Experimental Development) is Canada's largest R&D incentive, designed to support innovation across industries, including software, medtech, cleantech, and beyond.

"SR&ED is not just for scientists in labs , it's for anyone investing in technological uncertainty," said Philip Cheuk, Sr. Manager of Customer Delivery at Boast.

Breaking Down Common SR&ED + IP Myths

We teamed up with Siamak Riahi, Founder and CEO of Riahi Patents, to dig into how IP strategy and SR&ED funding can align and where they diverge.

Here are the top misconceptions founders need to avoid:

Myth 1: If I file a patent, I'm automatically eligible for SR&ED

Reality: Filing a patent doesn't guarantee SR&ED eligibility. Likewise, being eligible for SR&ED doesn't mean your work is patentable. These are separate but complementary tools.

Myth 2: I can include patent filing fees in my SR&ED claim

Reality: SR&ED excludes legal and IP filing costs. But once your refund comes in, you can absolutely reinvest those funds into building your IP portfolio.

Myth 3: SR&ED is only for completed products or successful prototypes

Reality: SR&ED is process-focused, not outcome-focused. If your work meets the criteria — uncertainty, systematic investigation, and advancement. you're likely eligible, even if the final product never ships.

What Makes SR&ED Eligible?

Philip Cheuk outlined the three pillars of SR&ED eligibility:

  1. Technological Uncertainty: You're solving a problem where the outcome isn't known in advance.
  1. Systematic Investigation: There's a method to your development, even if it includes trial and error.
  1. Technological Advancement: Your work results in new knowledge or capabilities, even if it fails.

SR&ED rewards the work behind innovation, not just the end result.

IP Strategy: What's Worth Protecting?

Siamak Riahi explained that a modern IP strategy isn't just about patents, it's about aligning your R&D, business model, and funding roadmap.

That includes knowing:

  • What should be patented
  • What should be protected as a trade secret (like source code or algorithms)
  • When to file for trademarks or copyrights
  • How to ensure you're not under-protecting your IP before talking to investors

"The right time to build your IP strategy was yesterday," Riahi noted. "The second-best time is today."

His advice? Start small, document everything, and let your IP strategy evolve with your product and business goals.

Funding Stack: Grants That Support IP Development

Founders building in Canada have access to several programs that can supplement SR&ED — especially when building or protecting IP assets:

Program Region Funding Coverage Ideal For
IPON Ontario 80% covered, 20% founder Startups in AI, cleantech, or advanced sectors
Elevate IP Nationwide 75–90% covered Early-stage companies needing IP strategy help
IRAP IP Assist Nationwide Strategy-focused For startups with an NRC advisor
CanExport Nationwide 50% cost-share Companies ready to file IP abroad
iA Cleantech Nationwide Variable; by application Revenue-stage cleantech innovators

These programs can often be layered with SR&ED for greater non-dilutive funding. Boast and Riahi Patents both offer guidance on how to sequence or combine them effectively.

6 Key Questions Founders Are Asking

Yes. SR&ED is based on process, not success. If your work involved uncertainty and systematic investigation, it may still qualify.

No. Legal and IP-related filing costs aren't eligible. However, SR&ED refunds can be used to fund IP protection going forward.

While they're distinct, they can work in sync. For example, documenting your experimentation can support both patent filings and SR&ED claims.

No. What matters is the nature of the work , not who performs it. That said, systematic documentation and technical logic are essential.

As early as possible. Investors and SR&ED reviewers both care about what’s been protected and how your innovation is defined.

Start by working with experts. Boast can help with SR&ED eligibility, and partners like Riahi Patents can map out your IP roadmap.

Final Thoughts: Your R&D + IP Strategy Should Work Together

For growing companies, the difference between thriving and stalling often comes down to access — access to capital, expertise, and protection. Aligning your IP roadmap with your SR&ED strategy unlocks all three.

Whether you're preparing your first claim or scaling your technical team, don't let myths or missing paperwork slow you down. Boast helps innovative companies secure the tax credits and insights they need to build confidently.

Ready to futureproof your IP and unlock tax incentives?