The latest Federal Budget delivered a transformative update for Canadian innovators. The "Productivity Super-Deduction" officially raised the expenditure ceiling for the 35% refundable SR&ED credit from $3 million to $6 million for Canadian-Controlled Private Corporations (CCPCs). Most critically, the government reversed a decade-old policy by restoring the eligibility of capital expenditures.
The $6M Ceiling
CCPCs can now access up to $2.1 million in fully refundable cash back annually — up from the previous $1.05M cap — providing a massive liquidity injection for scaling tech and manufacturing firms.
Capital Expenditures Return
For the first time since 2014, machinery, testing equipment, and specialized property acquired for R&D (after December 15, 2024) once again qualify for SR&ED tax credits.
Expanded Phase-Outs
The taxable capital thresholds used to phase out the enhanced credit have been significantly raised — now $15M to $75M — ensuring mid-market companies don't lose their benefits precisely when they are scaling fastest.
The Advisory Take
The government has effectively doubled the runway for high-growth firms. If your corporation is not aggressively capturing the newly reinstated capital expenditure credits, you are leaving substantial, non-dilutive capital on the table.