Tax credits are becoming central to how Canadian tech companies fund research and development.
“We’re still seeing significant untapped potential in fast-growing innovation markets like the US and Canada, where many companies have yet to fully capitalize on government incentives.”
Imad Jebara, Boast
That’s according to new data from software firm Boast, which reveals it helped North American companies secure close to $900 million USD in R&D credits between 2018 and 2024, with Canada accounting for 45 percent of those claims. Average annual claims delivered have also grown 245 percent since 2018.
The findings come from Boast’s 2026 R&D Benchmark Report, which draws on anonymized data from thousands of claims processed through its platform. Boast CEO Imad Jebara believes that the findings in this year’s report point to companies thinking more strategically about how they finance innovation.
“This is only the beginning,” Jebara said in a statement. “We’re still seeing significant untapped potential in fast-growing innovation markets like the US and Canada, where many companies have yet to fully capitalize on government incentives.”
Boast works with businesses across North America to identify, prepare, and maximize credit claims on their R&D through programs like Canada’s Scientific Research and Experimental Development (SR&ED) tax credit.
These programs allow companies to claim back a portion of R&D expenses already spent, such as salaries and, more recently, capital expenditures. For companies investing heavily in product development, this can translate into hundreds of thousands of dollars each year and help offset the risk of building new technologies.
A market awakening to opportunity
In 2015, Boast processed R&D tax credit claims from just 52 companies. But in the last eight years, that number has risen to 1,168 companies, which have claimed credits on $897 million in qualifying work since 2018.
Paul Davenport, Head of Content at Boast and author of the 2026 Benchmark Report, believes the upswing reflects both policy changes and improvements in how companies access the program.
“There have been enhancements to these funding programs since Boast got in the game that have made them a lot more valuable,” Davenport said. “The programs themselves have become more generous, while at the same time, solutions like Boast have made them a lot more approachable.”
Before the rise of solutions like Boast, filing a claim with SR&ED was a “headache.”
“It called on people from the finance team, people from the R&D team, people from your bookkeeping and general accounting team, who don’t necessarily all speak the same language,” Davenport added. “That could translate into hundreds of hours of your most valuable stakeholders in the company trying to come together and translate to each other and then speak the language of the CRA (Canada Revenue Agency).”
For a long time, that friction meant that companies often left money on the table every tax year, or avoided claiming altogether. Boast aims to streamline the process by pairing tax experts with finance teams to translate highly technical R&D work into claims that meet CRA requirements. The company also uses AI to consolidate data from internal workflows and payroll, allowing its experts to focus on building compelling claims.
Bigger payouts, tighter strategies
Boast’s report revealed that while claim volume stabilized in 2024, claim values continued to rise sharply. To Davenport, this indicates that businesses are thinking more strategically about how they can maximize their returns.
“For many reasons—microeconomic, macroeconomic—businesses were just a little more conservative in 2024,” he said. “There was a lot of uncertainty in general, but the businesses that had the workflows and the actual strategy set up to maximize R&D tax credit claims, that were already partnering with companies like Boast, were able to recoup those investments.”
As companies face rising capital costs and intensifying competition, these tax credits are becoming a more consistent source of non-dilutive capital. Boast’s report shows that small and medium-sized businesses account for roughly 90 percent of claims between 2018 and 2024, but that points to another misconception about R&D tax credits: that they’re only for early-stage companies.
“I think it’s actually most important for those growth-stage companies who need to find new solutions, need to find a competitive edge in the market, and need to take risks to stay competitive and continue growing, especially with all the global uncertainty,” Davenport added.
While mid-market firms accounted for just five percent of all claims in Boast’s dataset, their expenditures are significantly higher, at approximately $2 million on average. Many begin pursuing multi-jurisdiction claims, have established R&D tracking systems, and have claims large enough to justify specialized expertise.
Hardtech finds its footing
Programs like SR&ED have long been closely tied to software companies. According to Boast’s report, software and internet firms accounted for 80 percent of all claims between 2018 and 2024, with an average audit rate of five percent.
The program’s focus on software has historically left out the many tech firms working in hardware, robotics, and manufacturing. Manufacturing firms also faced a much higher audit rate of over 16 percent between 2018 and 2024.
Blake Nelson, Boast
“Essentially, our platform is already ahead of the tax forms. We’ll be ready to accept capital expenditures as soon as the tax forms come out.”
But recent changes to SR&ED are making the program more relevant to companies with a physical R&D footprint. These include the return of capital expenditure eligibility, which is key for hardtech firms that invest in materials and facilities for their R&D work.
“It’s a reflection of the government keeping pace with the state of technology,” Davenport added. “And it came at the right time, because, again, we’re not going to see the businesses that had that momentum lose it. We’re just going to see more businesses able to claim.”
Similar programs, like Québec’s CDAE-IA, are also evolving to reflect newer areas of innovation, chiefly AI. Boast has followed all these changes closely and is now positioning itself as ready to help a broader range of companies recoup their R&D spend.
“Essentially, our platform is already ahead of the tax forms,” said Blake Nelson, Principal Product Manager at Boast. “We have the system prepared to account for the new rules for future claims, and to adjust any claims that have already been filed accordingly. We’ll be ready to accept capital expenditures as soon as the tax forms come out.”
Stacking the returns
As companies grow more deliberate in how they approach R&D tax credits, many are also starting to factor them into broader financial strategies.
For growth-stage firms in particular, claiming credits both recovers costs and demonstrates discipline to investors. “From the VC side, they want to see that you’re claiming SR&ED,” Davenport added.
At the same time, maximizing those returns grows more complex as companies scale. Firms operating in Canada and the United States, for example, begin layering federal and provincial or state-level credits to increase total recovery, but doing so without ‘double dipping’ requires careful coordination.
This is where Boast is positioning itself: helping companies of all sizes structure claims across multiple programs and jurisdictions that ensure they capture the full value of their R&D activity.
“It is non-dilutive in the greatest sense of the word,” Davenport added. “It’s a recoup on money you already spent, and it’s also validation that you are tackling technological uncertainty.”
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Feature image courtsy Unsplash. Photo by UX Indonesia.