SR&ED Advocacy Alert: Policy Consolidation Affecting Eligibility, Contracts, and Proxy vs. Traditional: Urgent Call for Guidance
June 27, 2011

From the Desk of CATA's Sr. VP of Tax & Finance, Russ Roberts:

The CRA has just released Phase 3 of its Policy Consolidation Project which includes a new draft policy on what is SR&ED.  The deadline for comment to the CRA is August 4th.  The six new papers just released include explanations of CRA's positions on Eligibility, Contracts, and Proxy vs. Traditional.

++ Action Requested: Our SR&ED Advocacy team,  requires your input and guidance in order to ensure that any concerns and issues are addressed. 

Your first step is to review the six new policy draft documents at this URL:

It will be particularly important for all who are using the SR&ED Program or wish to do so to review the new policy on SR&ED.  It will set CRA's expectations for your claims in the future. 

We have been assured by the previous Ministers of Revenue that there was to be no change in the policy and that the Project was simply to result in a consolidation of existing polices with the intent of providing clarification. 

However, we are now hearing that this may not be the case and thus would like to hear your thoughts.

The key link to the draft paper on Eligibility is

It will be important to determine whether this document does capture more effectively the essence of the policy that has been in place for years and which has been the historical basis for claims or whether the new draft policy represents significant change for your company.

We have been hearing that, in many of their recent audits, CRA's reviewers have been taking a much narrower view of what SR&ED is and that they have been setting documentation expectations which significantly narrow the development environments in which SR&ED can be effectively claimed. 
In this respect, we suggest that it will be important to understand if and to what extent this new draft policy reinforces these more restrictive positions or rather deals with these issues in a way that reinforces historical policy as Revenue Ministers have assured us it would.

Please share your thoughts on this document with us directly ( and/or share your thoughts with your colleagues by joining the CATA SR&ED Group on LinkedIn at:

Of course, it is important to provide CRA with your thoughts by their deadline, albeit there is a lack of transparency in their process.