AFO · Head-to-head
Both are Canadian federal R&D programs but they work very differently. SR&ED is a refundable tax credit filed with the corporate tax return, claimed after the work is done. IRAP is a contribution program with up-front approval, you submit a project plan, get approved, then draw down funding as the work progresses. Most R&D-heavy businesses use both, sequenced carefully.
Side by side
The matrix below pulls directly from the catalog. Each row shows the same data point across both programs so you can spot the differences at a glance.
| Attribute | NRC IRAP: Industrial Research Assistance Program | SR&ED: Scientific Research & Experimental Development |
|---|---|---|
| Capital type | Government grant | Refundable tax credit |
| Family | Grants & refundable tax credits | Grants & refundable tax credits |
| Size range | $50,000, $10,000,000 | $25,000, No ceiling |
| Typical cost | Non-repayable contribution covering up to ~80% of internal technical salaries and ~50% of contractor costs on eligible projects. | CCPCs: 35% refundable on the first $3,000,000 of qualified expenditures, 15% non-refundable above. Provincial top-ups (Ontario, BC, Quebec, etc.) stack on top. |
| Speed to close | Weeks to a few months | Months |
| Eligibility | For-profit incorporated Canadian SME with under 500 staff and a project with clear technical innovation plus a credible commercialization plan. Pairs financial assistance with NRC technical advisors. | Canadian-controlled private corporation (or other corporation) conducting basic research, applied research, or experimental development in Canada. Activities must address technological uncertainty and seek technological advancement. |
| Use of proceeds | R&D / innovation | R&D / innovation |
| Status | Live, self-serve | Live, self-serve |
Choosing between them
Each side describes the scenarios where the program is the stronger fit. Most real-world deals end up in the “in common” section below, neither/nor.
When to choose
Pick IRAP when the project is technically novel, commercialization-focused, and you want pre-approval before committing the spend. IRAP pairs the funding with an industrial technology advisor who reviews the project, so the upside isn't just dollars, it's the advisor relationship. Covers up to 80% of internal technical salaries on approved projects.
When to choose
Pick SR&ED when the work is already underway (SR&ED is claimed in arrears against the corporate return), when you want the predictability of a refundable credit (35% on the first $3,000,000 of qualified pool for a CCPC), or when the project is too small for IRAP to underwrite. SR&ED has no project-approval gate; eligibility is determined at claim time.
The two stack. IRAP funds the technical labour as the project runs; SR&ED refunds 35% of the eligible pool at year-end. Both apply to the same R&D work, IRAP can't pay for time that's also claimed as SR&ED, but the rest of the project is claimable both ways.
The CPA can look at your specific situation and tell you in one twenty-minute call which program (or stack) is the right structure, and what providers will want to see before the first conversation.
