What’s the SR&ED refundable rate for a CCPC in Ontario for 2026?
For 2026, a qualifying Canadian-controlled private corporation (CCPC) in Ontario earns 35% federal refundable Investment Tax Credit on qualifying SR&ED expenditures up to the $3 million expenditure limit (ITA s. 127(10.1)), plus Ontario’s 8% Ontario Innovation Tax Credit (OITC, refundable) and 3.5% Ontario R&D Tax Credit (ORDTC, non-refundable). Combined effective rate above the SR&ED expenditure limit is 15% federal non-refundable plus provincial credits.
Federal ITC. Below the $3M expenditure limit, CCPCs get 35% ITC, fully refundable in cash within the current or next year of filing. Above $3M, 15% ITC, non-refundable (offsets Part I tax; excess carries forward 20 years, back 3 years).
Ontario stack. OITC 8% is refundable in cash and applies to qualifying SR&ED expenditures up to the CCPC’s Ontario expenditure limit. ORDTC 3.5% is non-refundable but longer-lived (20-year carry-forward).
Example: an Ontario CCPC has $1,000,000 of qualifying SR&ED wages, contractor fees, and materials in 2026. Federal refundable ITC = 35% x $1M = $350,000 cash. OITC = 8% x $1M = $80,000 cash. ORDTC = 3.5% x $1M = $35,000 credit against Ontario corporate tax. Total 2026 SR&ED benefit: $465,000 on $1M spend. Cash refund portion: $430,000.
SR&ED expenditures reduce corporate income by the amount of the ITC earned (ITA s. 12(1)(t) inclusion in the year received). Effective net benefit slightly below headline rate; still typically 30% to 40% net cash on qualifying spend.
Note: Confirm Ontario rates each January at ontario.ca/page/ontario-innovation-tax-credit and ontario.ca/page/ontario-research-and-development-tax-credit; the ORDTC has been reviewed in recent budgets. As of early 2026 the OITC 8% and ORDTC 3.5% are unchanged.
Source: canada.ca â SR&ED tax incentives
— Bader A. Chowdry, CPA, CA, LPA — Insight Accounting CPA
Disclaimer: Bader A. Chowdry, CPA, CA, LPA is a Licensed Public Accountant regulated by CPA Ontario. Insight Accounting CPA Professional Corporation is a Chartered Professional Accountant firm. This content is general information only and does not constitute professional advice for your specific facts. Confirm current rules and figures with your own advisor before acting.