The Canadian Chemical Industry is one of the largest and is a huge beneficiary of R&D policies. It’s a multifaceted sector, with many developments of study and innovation, which benefit countless other industries through its resources. Canadian resources are the keystone within the economy. Constantly growing, the sector extends from commodities, pharmaceuticals, polymers to oil companies, with a range of well-qualified scientists, and modern facilities.
In 2022, the pharmaceutical industry had an average revenue of $910.5 thousand and the industry shipments had a total value of $72.7 billion, according to the 2023 Economic Review of Chemistry done by the Chemistry Industry Association of Canada (CIAC). The industry also employs 90,800 workers, which makeup 6% of all manufacturing jobs in Canada.
SR&ED | R&D
The Scientific Research and Experimental Development (RS&ED) program is available to any business responsible for carrying out R&D in Canada, and have the intention to encourage businesses to conduct research and development in the country, with 2 different tax incentives:
- Claim a deduction against income.
- Earn an investment tax credit (ITC)
Like many other sectors, companies in the chemical industry can also benefit from tax incentives, both federal and provincial, as long as their work is eligible. In the SR&ED case, eligibility is based on two requirements:
- The work must be conducted for the advancement of scientific knowledge or to achieve a technological advancement.
- The work must be a systematic investigation or search conducted in a field of science or technology by utilizing experiment or analysis.
Qualifying R&D activities:
In the chemical industry, there’s a lot of activities that can be qualified as R&D, since it’s an industry with different subdivisions and types of work. Some examples of qualifying activities are:
- Development of a new synthesis route for a chemical compound.
- Development/improvement of a process to improve synthesis yield.
- Development of new analytical methods or improvement of the existing ones.
- Development of a new process to scale up production without compromising component stability, repeatability, or reproducibility.
- Improve product quality specifications with eco-friendly materials.
- Develop/improve tools for a more accurate quality control testing process with better feedback.
- Develop specialized software to analyze chemical properties in the research and testing phases.
- Improve wastewater treatment techniques.
- Developing processes that would meet increasing regulatory requirements.
- Developing environmentally friendly chemical processes and products.
- Explore the use of biological sources to produce chemicals and materials.
- Developing new drug compounds, improving drug delivery methods, and researching personalized medicine.
- Development of chemicals used in electronics manufacturing, such as semiconductor fabrication, display technologies, and printed electronics.
If the company performs any of these activities, it is likely eligible for the tax credit. Therefore, the ideal is to have a specialized vision so that the benefit can be identified and claimed.
How can we help you?
We specialize in helping companies finance innovation and secure funding for their Research and Development (R&D) activities through the comprehensive management of R&D Tax Credits. With more than 1,800 qualified employees, counting on specialists from different fields, committed to supporting companies of all sizes and in all sectors of activities. With our expertise, FI Group specialists can support your company in identifying qualified activities.