How SR&ED Helps Manufacturing Teams Innovate

Unlocking Innovation for Canadian Manufacturers

Manufacturers face constant pressure to increase manufacturing throughput, stabilize quality, and shorten time to market. The CRA's SR&ED program rewards this kind of technical problem solving with valuable tax credits. In manufacturing, SR&ED often applies to work that resolves real production constraints rather than blue-sky research.

What SR&ED Covers

SR&ED supports experimental development aimed at achieving a defined technological objective under uncertainty. If your team forms hypotheses, designs controlled tests, records results, and iterates when initial attempts do not meet specs, you are likely within scope. Typical eligible costs include technical staff time, prototype materials, and a reasonable share of consumables and overhead tied to the work.

Process Optimization

Operations engineers regularly pursue higher yields and shorter cycle times. Qualifying projects include optimizing heat treatment profiles, tuning tool paths to reduce chatter, redesigning fixtures to constrain tolerance stack-up, and implementing in-line metrology to detect drift. The key is that standard practice does not solve the issue outright, so the team designs trials, varies parameters, and validates performance with before-and-after data such as scrap rates, process capability improvements, and overall equipment effectiveness.

Automation Integration

Integrating robotics, vision, and custom controls often introduces technical uncertainty. Common examples include synchronizing multi-axis motion to avoid resonance, training vision systems to distinguish reflective surfaces, and adapting modern controllers to legacy equipment with nonstandard signaling. When off-the-shelf solutions fall short, engineers develop new algorithms, end-effectors, and fixtures, then verify results against real production variability. Those activities typically align with SR&ED’s definition of experimental development.

Prototyping and Iterative Development

In machinery and metalworking, new parts and assemblies rarely meet requirements on the first pass. Teams prototype, test under load and temperature, identify failure modes such as premature wear or weld distortion, and revise geometry, material, or joining methods. Each build-test-learn cycle that targets a measurable technological objective can qualify, provided the work is documented and driven by resolving uncertainty rather than routine workmanship.

How LFG Partners Adds Value

We map your technological objectives to the experiments performed, link eligible labor and materials to those experiments, and prepare clear technical narratives that align with CRA expectations. We also help put simple, durable record-keeping in place so future claims are easier and stronger. If your engineers are pushing limits on the shop floor, you are likely doing SR&ED already. Contact us to assess eligibility and turn that effort into cash flow that funds your next round of improvements.