Canada played a key role in inventing modern AI. Now, as the federal government launches a critical 30-day consultation to shape the next chapter of Canadian AI leadership, innovative businesses developing AI solutions are facing an unprecedented mix of opportunity and urgency.

The stakes couldn’t be higher: Canada’s position as an AI superpower depends on companies like yours staying competitive, scaling quickly, and continuing to push the limits of what’s possible. The government recognizes this, which is why they’re not just seeking input on AI strategy—they’re backing it up with the most generous R&D funding enhancements we’ve seen in years.

A National Sprint to Define AI Leadership

From October 1 to 31, 2025, the federal government is calling on founders, researchers, and innovators to help shape Canada’s renewed AI strategy. This isn’t just for show—it’s a real nationwide push to answer key questions about how Canada will speed up safe AI adoption, help Canadian AI leaders grow, strengthen Canada’s sovereign infrastructure, and build public trust.

This consultation builds on Canada’s Pan-Canadian AI Strategy (launched in 2017) and the 2024 Canadian Sovereign AI Compute Strategy. But this time, there’s a renewed sense of urgency. Canada faces fierce global competition for AI talent, investment, and leadership. The government’s vision is clear: Canada will lead the world in responsible, secure AI, leveraging our unique strengths to drive economic growth and opportunity for everyone.

For AI innovators, this is a clear sign that government support for the sector is ramping up at exactly the right time.

The Perfect Storm: Enhanced Funding Meets AI Innovation

While the consultation will shape long-term strategy, financial support for AI companies is already evolving. Three major policy changes are creating unprecedented opportunities for AI innovators to access non-dilutive funding:

Federal SR&ED Enhancements: Your R&D Is Now Worth Even More

The December 2024 SR&ED reforms are the most significant program upgrades in years. For AI companies, the impact is transformative:

Higher Credit Limits: The enhanced 35% refundable tax credit limit has increased from $3 million to $4.5 million in eligible expenditures. For qualifying Canadian-controlled private corporations, this means up to $1.575 million per year in refundable credits—a potential $525,000 boost to your annual cash flow.

Public Company Eligibility: Canadian public corporations can now access the same enhanced 35% refundable credits on up to $4.5 million in qualifying expenditures. Previously, public AI companies were limited to non-refundable credits—now, you can get real cash back from your R&D investments.

Capital Expenditures Return: Perhaps most important for AI developers: capital expenditures are back. AI development often requires major investments in compute infrastructure, specialized hardware, and data processing equipment. These capital investments now qualify for both SR&ED deductions and investment tax credits.

If you’re developing large language models, computer vision, or other AI solutions that require significant computing power, the return of capital expenditure eligibility could make your claims much more valuable.

Quebec’s CDAEIA: Provincial Support Tailored for AI

Quebec isn’t waiting for the federal government to finalize its strategy—they’ve already shifted their flagship innovation program to focus on AI. Starting in 2026, the Tax Credit for the Development of E-Business (CDAE) becomes the CDAEIA, with AI integration as a key requirement.

The CDAEIA is more than just a new name—it’s a strategic shift. Eligible activities must be closely tied to information system design or software publishing and must significantly integrate AI features like machine learning, neural networks, automated business processes, or data-driven customer experiences.

For Quebec-based AI companies, this creates a powerful funding combination: Federal SR&ED credits for experimental development, plus provincial CDAEIA credits for AI integration and implementation. Forward-thinking companies are already building strategies to maximize both programs at once.

The AI-R&D Multiplier Effect

Recent McKinsey research shows why government investment in AI innovation is accelerating: AI itself is dramatically boosting R&D productivity across industries. In pharmaceuticals, AI could more than double R&D output. In gaming, AI could increase output by 150%. Even in conservative sectors like aerospace, AI could speed up R&D by 25%.

This creates a virtuous cycle: AI innovation makes R&D more productive, which leads to more qualifying R&D activities, unlocking more funding to accelerate AI development even further. Companies that understand this dynamic and position themselves strategically will multiply their advantages.

What AI Innovators Should Do Right Now

With government consultations, improved funding programs, and rapid advances in AI, three priorities stand out right now:

Get Involved in the National Consultation

The October 31 deadline is coming up fast. If you’re developing AI solutions, the government wants your input. Key areas where founder feedback is critical:

  • Commercialization pathways: What’s stopping AI research from turning into real-world products?
  • Infrastructure needs: What compute, data, and cloud capabilities do you need to compete globally?
  • Talent retention: What would keep your AI researchers and developers in Canada?
  • Regulatory balance: How can Canada ensure AI safety without holding back innovation?

Send your feedback to [email protected] or use the official consultation portal. Your hands-on experience building AI solutions matters.

Review Your R&D Activities with an AI Focus

Many AI companies underestimate the full scope of their qualifying R&D activities. With higher SR&ED limits and the return of capital expenditure eligibility, now is the time for a thorough audit:

  • Algorithm development: Experimental work to improve model performance, reduce bias, or overcome technical hurdles
  • Data pipeline innovation: New ways to collect, clean, label, or process data
  • Infrastructure optimization: Systematic work to improve compute efficiency, distributed training, or resource management
  • Integration challenges: Technical uncertainty around deploying AI models in production environments
  • Capital investments: Hardware, GPUs, and specialized equipment for developing and training AI

The key is proper documentation. AI development often involves rapid iteration and experimentation—exactly the kind of systematic investigation that qualifies for SR&ED. But you need up-to-date records that capture the technological uncertainty, hypotheses tested, and systematic approaches used.

Develop an Integrated Multi-Program Strategy

The most successful AI companies don’t choose between SR&ED and provincial programs—they optimize for both. Consider:

For Early-Stage AI Startups: Focus on SR&ED for experimental development while you’re doing fundamental research and proof-of-concept. The new $4.5 million limit offers major support during capital-intensive research phases.

For Growth-Stage AI Companies: Use both SR&ED for ongoing R&D and CDAEIA (if you’re in Quebec) for AI implementation. This combination can fund both breakthrough research and product development.

For Scaling AI Enterprises: With capital expenditure eligibility restored, larger companies can now claim credits on major infrastructure investments while still making SR&ED claims for ongoing experimental development.

The real question isn’t which program to choose, but how to organize your activities to get the most out of both.

Why AI Companies Need Specialized Expertise

Here’s the reality: The intersection of AI development, changing tax rules, and multiple funding programs is extremely complex. The companies that succeed are those who partner with specialists who understand both the technical details of AI-qualifying activities and the regulatory landscape.

This is especially important for AI companies because:

AI Activities Are Often Misunderstood

Government reviewers may not immediately recognize novel AI work as qualifying R&D. Explaining why your approach to optimizing transformer architectures involves technological uncertainty requires expertise in both AI development and SR&ED criteria.

Documentation Requirements Are Changing

As AI development speeds up, documentation practices need to keep pace. Up-to-date records of experiments, failed approaches, and systematic investigation are crucial during audits, but many AI teams aren’t naturally documenting in ways that meet SR&ED requirements.

Multi-Program Optimization Demands Strategy

Deciding which activities qualify for SR&ED versus CDAEIA, when to claim capital expenditures, and how to structure projects across multiple jurisdictions takes specialized knowledge. Small optimization decisions can mean hundreds of thousands of dollars in extra funding.

Audit Defense Needs AI-Specific Expertise

When government reviewers question your claims, you need advocates who can clearly explain why your AI development involves technological uncertainty—not just routine engineering. This requires deep knowledge of both AI development and government audit processes.

Boast’s Advantage for AI Innovators

That’s where Boast’s unique mix of technology and expertise makes all the difference. We’re not traditional accountants treating R&D credits as just another line item, and we’re not just automated tools that miss strategic optimization opportunities.

Instead, we’ve built a platform specifically for innovative companies pushing technological boundaries—exactly what AI development is all about:

AI-Ready Documentation: Our platform creates thorough audit documentation from day one, tracking the experimental nature of AI development in ways that meet government requirements—without disrupting your development workflows.

Multi-Program Optimization: We help you organize your activities to maximize both federal SR&ED and provincial programs like the CDAEIA, so you don’t miss out on any available funding.

Technical Expertise: Our team understands the challenges of AI development and can explain technological uncertainty in language that resonates with government reviewers.

Capital Expenditure Strategy: With capital eligibility restored, we help AI companies maximize claims on compute infrastructure, specialized hardware, and equipment investments.

Year-Round Partnership: Unlike consultants who disappear after submitting your claim, our platform delivers ongoing value with policy updates, continuous optimization, and audit support whenever you need it.

Canada’s AI Future Depends on Companies Like Yours

Every AI company that scales successfully, every breakthrough in Canadian labs, and every AI solution that solves real problems strengthens Canada’s position as an AI superpower.

But that leadership depends on companies having the cash flow to hire top talent, invest in infrastructure, and push through the experimental phases where breakthroughs happen.

With the improved SR&ED program, provincial AI-focused credits, and broader government support, Canadian AI companies are better positioned than ever to compete globally. The real question is: Are you ready to make the most of these opportunities?

Your Next Steps

With the October 31 consultation deadline approaching, three actions matter most:

  1. Join the national conversation. Share your perspective on what Canada needs to do to support AI innovation. Your voice shapes policy.
  2. Review your current R&D funding strategy. With higher limits and capital eligibility back in play, you could be leaving significant value unclaimed.
  3. Work with specialists who understand AI. The complexity of modern AI development and evolving funding programs means you need expertise in both areas.

Canada helped invent modern AI, but maintaining leadership requires relentless innovation and smart use of every available resource. The government is stepping up with enhanced funding and strategic focus. The question is: are you ready to maximize the opportunity?

Ready to explore how enhanced SR&ED credits and AI-focused programs can accelerate your innovation? Let’s ensure you’re positioned to capture every dollar of funding you deserve while contributing to Canada’s AI leadership.

Because the next chapter of Canada’s AI story will be written by companies that moved decisively when the opportunity was clear. Make sure your company is one of them.