Examples of SR&ED-eligible projects

1. Cybersecurity Software Startup (Halifax)

A small cybersecurity startup in Halifax was building new security software to detect cyber threats.

Technical challenge

• The team needed to design new methods to identify unknown attack patterns.

• Existing detection systems produced too many false positives.

SR&ED work

• Experimenting with detection algorithms

• Testing multiple architectures for threat analysis

• Iterating on anomaly-detection models

Result

• The company recovered over 40% of its R&D costs through SR&ED tax credits.

The funding helped them finish the core product and attract venture capital.

2. AI Predictive Analytics Startup (Ottawa)

An artificial intelligence startup developing machine-learning software for predictive analytics faced heavy R&D costs.

Technical uncertainty

• Determining whether their algorithm could reliably predict complex business outcomes.

SR&ED activities

• Data modeling experiments

• Algorithm optimization

• Large-scale testing and iteration

Result

• SR&ED allowed the company to recover over 40% of R&D expenses, including developer salaries and prototype testing.

The company reinvested the credits into engineering hires and scaling its platform.

3. Cybersecurity & Data Transmission Company (Winnipeg)

A software consulting and development company that develops software for cybersecurity and high-speed data transmission.

Technical problem

• Improving secure data transmission speeds without compromising encryption.

SR&ED work

• Developing new encryption approaches

• Experimenting with data transfer protocols

• Performance testing across networks

Outcome

SR&ED funding enabled the company to hire more engineers and expand R&D operations, strengthening Canada’s innovation ecosystem.

4. Imaging & Data Analytics Startup (Calgary)

A data and technology company specializing in advanced imaging analytics.

Technical challenge

• Creating new imaging methods for industries like energy, medical, and defense.

SR&ED experimentation

• Developing software algorithms to analyze imaging data

• Testing different modeling techniques

• Integrating geophysical and environmental data

Results

SR&ED funding allowed Turkana to expand software development and create technologies that reduce environmental impact and improve industrial monitoring.

5. Clean-Energy Startup (Burnaby)

A Canadian clean-tech startup developing hydrogen energy storage systems.

Technological uncertainty

• How to safely store and deliver hydrogen energy at scale.

SR&ED work

• Testing new hydrogen storage materials

• Experimenting with fuel-cell integration

• Building prototypes for transport and industrial applications

Impact

• The company advanced clean-energy technologies capable of powering vehicles, drones, buildings, and industrial equipment.

Key Takeaways for Startups

Across these examples, SR&ED typically funded:

Algorithm development
Experimental software architecture
Prototype testing and iteration
Data analysis and modeling

Most startups recover 30–40% of eligible R&D costs, which can include:

• Developer salaries

• Cloud computing used in experiments

• Materials or prototypes

• Contractor R&D work

Important insight:
Even failed experiments qualify under SR&ED if they attempt to resolve a technological uncertainty through systematic experimentation.

Examples That Usually Do NOT Qualify

Even if the project is technical, these typically don’t meet SR&ED criteria:

• Routine software development

• Building standard web or mobile apps

• Migrating to a new programming language

• Implementing existing frameworks

• UI/UX improvements

• Bug fixing and maintenance

• Real-Time 3D Rendering Optimization