The CRA currently uses a 2-step review methodology:
Step 1: Determine if there is SR&ED
This is done by reviewing the project looking to answer five key questions:
1. Was there a scientific or a technological uncertainty?
2. Did the effort involve formulating hypotheses (theories) specifically aimed at reducing or eliminating that uncertainty?
3. Was the overall approach adopted consistent with a systematic investigation or search, including formulating and testing the hypotheses by means of experiment or analysis?
4. Was the overall approach undertaken for the purpose of achieving a scientific or a technological advancement?
5. Was a record of the hypotheses tested and the results kept as the work progressed?
If the answer to each of these questions is “yes” there is SR&ED.
Step 2: Determine the extent of eligible work
In this step, the details of the activities undertaken for each project are examined to determine what work is SR&ED.