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4 Key SR&ED Eligibility Phrases Translated

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SR&ED Eligibility

Translating SR&ED eligibility phrases.


It can often seem that SR&ED reviewers at the Canada Revenue Agency (CRA) communicate using a completely different language. The CRA often use different terminologies and definitions than those used commonly in English, or by businesses.

Common CRA SR&ED Eligibility Phrases

Here are some common key phrases pulled directly from the T661 SR&ED expenditures form, which is administered by the CRA:

    • “advance the understanding of scientific relations or technologies”
    • “scientific or technological uncertainty”
    • “incorporate a systematic investigation”
    • “conducted by qualified personnel”

Let’s explore what each of these four phrases means for the average tax incentive applicant.

“Advance the understanding of scientific relations or technologies”

What the CRA is looking for is whether or not your project was attempting to improve an existing technology or create a brand new one to fill a knowledge gap.

For example:

    • Designing an innovative Javascript environment to handle a particular problem would likely constitute a technological advance.
    • Improving an existing manufacturing technique by analyzing the production line and introducing a new process to improve efficiency by 20% would also constitute a technological advance.

The important aspect here is that the CRA wishes to focus on the underlying technology, not just features. It’s not the fact that your product is now able to handle A, B and C; it’s how you implemented the new features at an architectural level that matters the most.


    • It’s not the manufacturing line that’s the advance, it’s the new process which will demonstrate the advance.

“Scientific or technological uncertainty”

This phrase explains what was difficult about your SR&ED project. With all the decades of industry research, work and experience in that particular field, why has this problem/issue not been resolved yet? What were the gaps in knowledge that had to be overcome?

These uncertainties can take various forms: there doubt as to whether a specification could be met within the technical constraints, the problem was too complex to tackle with then-existing processes, etc. The goal, when describing the scientific or technological uncertainty, is to tell the CRA why attempting to solve the project’s uncertainties would not be a trivial process.

It is important to remember that scientific or technological uncertainty must be demonstrated irrespective of your project’s scope–multi-million-dollar research projects with an army of engineers and lone garage innovators alike must meet this requirement.

It is absolutely essential to clearly define the uncertainties and obstacles you faced. The greater the uncertainties, the easier it is to show that any small advancement forward is an eligible advance, given the problems posed by the uncertainties.

“Incorporate a systematic investigation”

Failure to satisfy this requirement is a common pitfall for many claimants. It refers to the CRA’s requirement that the work performed be systematic and controlled. A SR&ED claim for a project that involved overcoming seemingly insurmountable difficulties could still be denied if the work performed to achieve the advancement was not done in the ‘proper’ way.

As a general rule, ‘proper’ means following the scientific method whenever possible. This involves formulating an if-then hypothesis (i.e. I predict that if I introduce component A, then I will be able to solve the problem with component B). After establishing a hypothesis, the next steps are developing well-controlled testing procedures to evaluate the validity of the hypothesis, conducting the experiments, and then recording/interpreting the results.

Essentially, claimants need to be able to show that the work performed was not haphazard or random. Every activity performed should have a goal in mind that would bring the project closer to realization. Documenting all the steps–especially the unsuccessful experiments or things that didn’t work as expected–is extremely important.

One of the biggest hurdles that most claimants encounter is whether or not their work has been properly documented and therefore has evidence of being done. It is incredibly important to establish good habits early on so you aren’t in a panic in the days before the claim’s due date. (To help with this, subscribe to our RSS feed and check back often for great  documentation tips to help keep your project on the right track.)

The best records are those created at the time the work was done, ensure you keep and maintain contemporaneous documentation throughout your SR&ED project.

“Conducted by qualified personnel”

This phrase is fairly straightforward; the CRA expects that the people who did the work on the SR&ED project were qualified to do it. But what does “qualified” actually mean? Often times, it means having the right academic credentials. It can also be a combination of formal training and practical experience in a particular area.

What’s important is that your personnel have enough knowledge so that they are aware of standard practices and the ‘common store of knowledge’ in your particular industry.

Being passionate about your work is not enough. If you don’t personally have the requisite expertise, ensure that you employ staff with the necessary specialization to conduct the research.


Understanding the CRA and its specific terminology will enable you to understand how you should conduct your SR&ED project. Knowing exactly what should, or should not, be included in your SR&ED claim may mean that your claim is less likely to undergo a review.

Do you have any other experiences with CRA’s terminology?

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Elizabeth Lance

Elizabeth is known as the "SR&ED Maven" in the industry. With a love of documentation and the nuances of language, she is often engaged by multi-million dollar companies to help improve documentation and workflow processes. Her favourite sentence (which she hears regularly) is "Accepted as Filed". Find out more about her on LinkedIn.

One thought on “4 Key SR&ED Eligibility Phrases Translated

  • Wow… this is a great post! I love how you just took a confusing form and made it so I actually know what in the world CRA is looking for. This will definitely help with getting SRED Claims done right the first time, although there is still a lot of other hurdles to jump over. Probably why it is a good idea to get a professional to help with these claims.

    This really hit home with me “It’s not the manufacturing line that’s the advance, it’s the new process which will demonstrate the advance.” All too often it just happens that people will focus on the manufacturing line or the end results instead of the actual process (the bad and the good of the process). This is definitely a great reminder!

    Thanks again for the useful information.


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