SR&ED Reform: Government Releases Draft Legislation Expanding Public Company Access

We are thrilled to provide a significant and positive update on our collective advocacy efforts to reform Canada's Scientific Research & Experimental Development (SR&ED) program.

As you may recall, TMX Group, with the crucial support of issuers, submitted a detailed response to the government's consultation on this program. Our core argument was clear: a company's capital structure—whether public or private—should not determine its eligibility for SR&ED benefits. We advocated for a level playing field, ensuring that early-stage public companies can access the same refundable credits as their private counterparts to fund innovation, retain Canadian intellectual property, and grow their businesses here in Canada.

A Landmark Development: Draft Legislation Released

We are delighted to report that the government has taken a decisive step in this direction by releasing draft legislation that directly reflects our key recommendations.

If passed, these changes will expand access to refundable SR&ED credits to public companies. The legislation introduces a new category of "Eligible Canadian Public Corporations" that would qualify for the enhanced 35% refundable tax credit on qualifying R&D expenditures.

This means that smaller, Canadian-resident public companies will now receive equal treatment to their privately held peers within the SR&ED program—the exact outcome we have been fighting for.

What This Means for You & Next Steps

If passed, this is a monumental win for Canadian innovators. The proposed changes will unlock a vital source of non-dilutive capital, allowing your companies to invest more confidently in research and development.

The draft legislation is now open for public consultation until September 12, 2025, and is expected to be included in the upcoming Fall Economic Statement. If passed as anticipated, the changes will take effect retroactively as of December 16, 2024.

This development demonstrates that the government has heard our collective voice and is committed to advancing this important policy. We are now one critical step closer to making these much-needed reforms a reality.

TMX Group will remain actively engaged throughout the consultation period to ensure this legislation reaches its intended outcome. Thank you once again for your invaluable partnership.