Bill C-15 Is Law: Canada's Biggest SR&ED Overhaul in a Decade Is Now Official

What Is Bill C-15?

Bill C-15 is the Budget Implementation Act, 2025, No. 1. It was tabled in the House of Commons on November 18, 2025 to implement key measures from the 2025 federal budget and the 2024 Fall Economic Statement. The bill is an omnibus piece of legislation covering everything from housing policy to financial sector reform. For Canadian businesses doing R&D, the SR&ED enhancements in Part 1 of the bill are the provisions that matter most.

Bill C-15 is now cited as Statutes of Canada 2026, c. 3.

The Six SR&ED Changes That Are Now Law

These changes represent the most significant enhancement to the SR&ED program since capital expenditures were removed in 2014.

1. 1

   Expenditure Limit Doubled

   The annual expenditure limit for the enhanced 35% refundable SR&ED investment tax credit has increased from $3 million to $6 million. This limit is shared among associated corporations. At the enhanced 35% rate, a qualifying CCPC can now earn up to $2.1 million per year in refundable federal SR&ED credits, up from $1.05 million. Qualified expenditures beyond the $6 million limit continue to earn ITCs at the basic 15% rate.

2. 2

   Enhanced Credit Extended to Public Corporations

   For the first time, eligible Canadian public corporations can access the 35% refundable SR&ED investment tax credit. Previously, only Canadian-Controlled Private Corporations qualified for the enhanced rate. All other corporations were limited to the 15% non-refundable basic rate. Eligible public corporations are subject to a revenue-based phase-out for their consolidated group.

3. 3

   Capital Expenditures Restored

   Capital expenditures related to equipment, machinery, or facilities used directly in R&D are once again eligible for both the SR&ED income deduction and the investment tax credit. Lease costs for R&D capital assets are also eligible. To qualify, the property must be intended for use all or substantially all of its operating time in SR&ED activities in Canada. Capital expenditure ITCs for qualifying CCPCs are refundable at 40%, compared to 100% refundability for current expenditures. Used or previously owned property is not eligible for the ITC.

4. 4

   Taxable Capital Phase-Out Raised

   The prior-year taxable capital thresholds that determine whether a CCPC's expenditure limit is reduced have increased. The lower threshold moved from $10 million to $15 million. The upper threshold moved from $50 million to $75 million. Below $15 million in taxable capital, a CCPC retains the full $6 million expenditure limit.

5. 5

   Revenue-Based Phase-Out Election

   CCPCs and their associated groups can now elect to have their expenditure limit phase-out determined based on average annual revenue over the preceding three fiscal years, rather than taxable capital. This gives CCPCs with high taxable capital but modest revenue an alternative path to maintaining the enhanced credit rate.

6. 6

   Administrative Modernization

   Bill C-15 introduces a pre-claim approval process for upfront technical validation, intended to reduce processing times from 180 days to 90 days, effective April 1, 2026. CRA will also increase its use of AI in program administration for claim review and processing.

When Do the New Rules Take Effect?

For a corporation with a December 31 fiscal year-end, the 2025 tax year is the first year under the new rules. If your company has a non-standard fiscal year-end, the effective date depends on when your tax year begins. A fiscal year that started before December 16, 2024 is still governed by the old rules.

What This Means for Your Business

CCPCs under $15 million in taxable capital

You now have a $6 million expenditure limit for the enhanced 35% refundable credit. If your annual SR&ED expenditures are under $3 million, the rate and refundability haven't changed, but you have significant headroom to scale R&D spending at the enhanced rate. If your expenditures were bumping up against the old $3 million cap, the new limit effectively doubles your refundable credit capacity.

CCPCs between $15 million and $75 million in taxable capital

You previously lost access to the enhanced rate when taxable capital exceeded $10 million. The raised thresholds mean you may now qualify for a partial or full enhanced credit where you previously did not.

Canadian public corporations

Check whether you meet the definition of an eligible Canadian public corporation under the new rules. If you qualify, you now have access to the 35% refundable credit for the first time.

Companies investing in R&D equipment

Capital expenditures are back. Lab equipment, prototype machinery, dedicated R&D computing infrastructure, and other capital assets acquired after December 15, 2024 are now eligible for both the income deduction and the ITC. If you acquired qualifying property in late 2024 or anytime in 2025, those expenditures should be included in your current claim.

Frequently Asked Questions

What You Should Do Now

1. 1

   Review your 2025 SR&ED expenditures

   If your qualified expenditures are between $3 million and $6 million, you now earn the enhanced 35% credit on the full amount.

2. 2

   Inventory your capital expenditures

   Any R&D equipment, machinery, or facility costs incurred after December 15, 2024 may now be eligible. Gather invoices, purchase orders, and asset records.

3. 3

   Check your taxable capital

   If your company was previously phased out of the enhanced rate between $10 million and $50 million in taxable capital, re-evaluate under the new $15 million to $75 million thresholds.

4. 4

   Assess ECPC eligibility

   If you are a Canadian public corporation, determine whether you meet the new criteria for the enhanced refundable credit.

5. 5

   Prepare your claim

   The new rules are retroactive. You do not need to wait for updated CRA forms to begin preparing your SR&ED documentation, narratives, and expenditure calculations.

Sources

• Government of Canada. Legislation passes to implement Budget 2025: Canada Strong. March 26, 2026. canada.ca
• Parliament of Canada. LEGISinfo, Bill C-15 (45-1). Statutes of Canada 2026, c. 3. parl.ca
• EY Canada. Canada substantively enacts capital cost allowance and other business income tax measures in Bill C-15. Tax Alert 2026 No. 13. ey.com
• PwC Canada. Tax Insights: Bill C-15 implements SR&ED, capital cost allowance and transfer pricing changes. pwc.com
• Doane Grant Thornton. What Bill C-15 means for you, your trust, or your business. March 2026. doanegrantthornton.ca
• MNP. Significant enhancement announced to the SR&ED program. mnp.ca