Two R&D categories exist; they are Scientific Research (SR) and Experimental Development (ED). The R&D pursuit must seek to advance, in the case of SR, the companies understanding of scientific relations or, in the case of ED, advance the state of technology. Such work must be conducted by means of a systematic investigation or search carried out through experiment or analysis to resolve either a scientific or technological uncertainty. To qualify for the SR&ED program, the R&D activities must be carried out be qualified personnel and performed in Canada by a Canadian company.

R&D work that qualifies for investment tax credits includes:

• Experimental development where such work seeks to achieve a technological advancement to create new materials, devices, products, or processes, or improve existing ones.

In the case of Scientific Research the work can be either applied or basic where:

• Applied research seeks to advance scientific knowledge with a specific practical application in view; and
• Basic research seeks to advance scientific knowledge without a specific practical application in view; and

When the work is commensurate with, and directly supports, the eligible Scientific Research or Experimental Development project then the following support work qualifies:

• support work in engineering, design, operations research, mathematical analysis, computer programming, data collection, testing, or psychological research, but only if the

The following activities are not eligible for benefits under the SR&ED program:

• social science and humanities research;
• commercial production of a new or improved material, device, or product, or the commercial use of a new or improved process;
• style changes;
• market research or sales promotion;
• quality control or routine testing of materials, devices, products, processes and routine data collection;