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Forking Out R&D Funds for Canada’s Food and Beverage Processing Industry

In 2016, the Food and Beverage sector produced $112 billion in shipped goods and had the largest gross domestic product share, 16.4% (valued at $28.5 billion), within the manufacturing industries. It directly employs over 250,000 Canadians from over 6000 businesses and in most provinces, especially in rural areas, is the predominating manufacturing industry. Approximately 70% of all processed food and beverage products made locally available to us are produced in Canada. Most importantly, the Canadian Food and Beverage sector demonstrated great resilience during the 2008 recession with a steady increase in employment and revenue.

As one of Canada’s strongest economic drivers, surprisingly, food and beverage manufacturing ranks 30th out of 45 different Canadian industries in R&D strength. Compared against the G7, Canada’s Food and Beverage sector is underperforming in research magnitude, growth, and intensity. Ontario specifically dropped in research intensity from 0.72% in 2007 to 0.6% in 2012. While high levels of R&D do not necessarily precede increase in labour productivity, it can be a great indicator. More importantly, R&D provides a competitive edge for the industry; with more innovation we create more products, open up more jobs directly and indirectly, and retain more talent. This means that there is a burgeoning market that Canada has the potential to grow into, but it has been largely impeded by low levels of investment into the industry.

What are available funding resources for food and beverage R&D?

Recent efforts by the federal government in conjunction with private corporations have put forward $6.6 million to further food and beverage processing research. Private funding programs are also available, but they are often incubators or accelerators that mainly target early-stage growth of businesses. While this is pertinent for growth of the sector, later stages of business development are focussed on optimization and commercialization.

Another resource for small to medium-sized businesses is the proposal-based National Research Council of Canada Industrial Research Assistance Program (IRAP). For more information on eligibility and the application process, please visit: https://nrc.canada.ca/en/support-technology-innovation.

How can Felix SR&ED help you?

The Canadian SR&ED program is a non-competitive and generalist approach to raising capital as an R&D business. As long as the company can demonstrate they are resolving an uncertainty using a well-designed approach, they can qualify for SR&ED. However, SR&ED projects are not limited to purely science research, it can include – but is not limited to – procedure optimization and technological advancement. Applicants may also be eligible for additional provincial tax credits which needs to be co-submitted with the SR&ED claim. For Ontario, this includes the Ontario Research and Development Tax Credit (ORDTC) and Ontario Innovation Tax Credit (OITC).

The largest determinant in success rates revolves around demonstrating the project qualifies for SR&ED tax credit. It has recently been found that nationally 60% of SR&ED claims get selected for local site referrals by the CRA with 27% leading to a site review. After the site review, more than half of these applicants had their SR&ED claims reduced.

At Felix SR&ED, we have a team of highly competent SR&ED tax consultants with in-depth scientific background and strong technical writing skills. We will complete and submit the required documents to maximize your tax returns and take care of potential reviews to help move your business in the right direction.

If you have any questions about SR&ED or are looking to have a free consultation with our team, contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.. We look forward to hearing from you!