Perhaps more remarkable, the company, which is building photonic quantum computers<\/a> designed to solve problems beyond today\u2019s capacity, attracted that level of investment while a commercially useful system and the revenue it could generate may still be years away.<\/p>\n \u201cVenture capital is built to reward speed and reduce risk quickly. Tough tech is the opposite of that on both counts.\u201d<\/p>\n That gap\u2014between innovation spending and selling\u2014is a defining feature of tough tech. Whether it\u2019s quantum or clean tech, advanced materials or next-generation therapeutics, these companies aren\u2019t simply improving an existing product. They\u2019re trying to turn new science into something that doesn\u2019t exist yet. It can take years to test the idea and build what\u2019s needed to bring it to customers, with no guarantee it will work as intended.<\/p>\n That makes securing money even harder than usual. Investors must commit before there\u2019s a proven product or customer demand, then wait much longer to find out whether the investment will pay off. That kind of bet isn\u2019t for everyone.<\/p>\n \u201cVenture capital is built to reward speed and reduce risk quickly,\u201d said Paul Davenport, head of content at Canadian R&D tax credit platform Boast<\/a>. \u201cTough tech is the opposite of that on both counts.\u201d<\/p>\n That\u2019s why recent changes<\/a> to Canada\u2019s Scientific Research and Experimental Development<\/a> program, better known as SR&ED, are particularly relevant to deep tech. By recognizing more of the upfront physical costs, the updated program could help extend the runway from a scientific breakthrough to something that can be put to work in the real world.<\/p>\n More costs qualify<\/p>\n SR&ED is Canada\u2019s largest federal R&D support program, returning, on average, more than $4.4\u00a0billion<\/a> in tax credits to over 19,000\u00a0claimants every year as non-dilutive capital to offset the cost of experimentation.<\/p>\n For years, the program was often considered a better fit for software and SaaS. Capital costs were removed from SR&ED more than a decade ago<\/a>, leaving companies doing physical R&D able to claim eligible wages and materials, but not much of the property needed to carry out the work. Bill C-15<\/a>, the federal budget legislation that became law in March, changes that. It restores capital expenditure eligibility for qualifying property acquired on or after Dec. 16, 2024, bringing more of the physical investment behind eligible R&D back into a claim.<\/p>\n \u201cWages and materials were never the whole story for capital-intensive R&D,\u201d said Davenport. \u201cNow the equipment and infrastructure that this kind of research actually depends on is back in scope.\u201d<\/p>\n The legislation also doubles the annual spending limit<\/a> for the enhanced refundable credit from $3 million to $6 million. At the 35-percent rate, the maximum federal refund rises from $1.05 million to $2.1 million. Eligible Canadian public companies can access the enhanced credit for the first time, as well.<\/p>\n SR&ED still won\u2019t replace investors or government grants, said Davenport. The money comes back after eligible work has been completed, but it can be put toward another experiment or technical milestone, helping other sources of funding go further.<\/p>\n Review the receipts<\/p>\n The broader eligibility doesn\u2019t mean every purchase can be claimed. SR&ED can be complicated because what matters isn\u2019t simply what a business bought or spent, but when it was acquired, how it was used and whether that use can be tied directly to eligible research<\/a>.<\/p>\n \u201cThe biggest misconception is assuming that this change is automatic,\u201d said Davenport. \u201cIt\u2019s just not that simple.\u201d<\/p>\n For companies wondering whether the new rules apply to them, he suggests starting with major capital purchases from the past 12 to 18 months. Review the receipts and flag any specialized equipment, prototyping tools or pilot-line infrastructure acquired after the eligibility date. Some of those costs may now qualify, including purchases made by businesses that previously decided a claim wasn\u2019t worth the effort.<\/p>\n Those with filings already underway should also check whether affected tax years can include the newly eligible spending rather than waiting until the next one.<\/p>\n The larger opportunity is to make SR&ED a regular part of the financing plan instead of trying to piece everything together at tax time. Boast, for example, can help companies review their spending, connect purchases to eligible work and gather the technical and financial records needed to support a claim. Once that process is in place, teams can document the research as it happens and plan how any refund could support the next stage.<\/p>\n Davenport said university and public research has created an early advantage in deep tech. Helping private companies build the facilities and specialized teams they need could extend that lead as the technologies mature.<\/p>\n \u201cCanada is already going to be off to the races,\u201d he said.<\/p>\n PRESENTED BY<\/p>\n Not sure whether your capital purchases qualify under the new rules? Talk to a Boast SR&ED expert.<\/a><\/p>\n Feature image courtesy Unsplash<\/a>. Photo by CDC<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"Expanded SR&ED support gives breakthrough science more time to move from the lab into real-world use.
Xanadu\u2019s…\n","protected":false},"author":2,"featured_media":172772,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[55126,17,12237,3841,1448,55125,15129,42521,12634,26746],"class_list":["post-172771","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","tag-boast","tag-canada","tag-deep-tech","tag-govt","tag-nasdaq","tag-paul-davenport","tag-sponsored","tag-sred","tag-toronto-stock-exchange","tag-xanadu"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/172771","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/comments?post=172771"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/posts\/172771\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media\/172772"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/media?parent=172771"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/categories?post=172771"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/canada\/wp-json\/wp\/v2\/tags?post=172771"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}![\"Paul](\"https:\/\/www.europesays.com\/canada\/wp-content\/uploads\/2026\/08\/Paul-headshot.jpg\" "\\"Paul")
<\/a>Paul Davenport. Image courtesy Boast.<\/p>\n![\"Boast-Logo-Color-WEB_edited\"](\"https:\/\/www.europesays.com\/canada\/wp-content\/uploads\/2026\/08\/Boast-Logo-Color-WEB_edited.png\" "\\"Boast-Logo-Color-WEB_edited"){kind=logo}
<\/p>\n