Overcoming Barriers to Developing Innovative Technology
The SR&ED and IRAP programs are aimed at reducing the funding difficulties of developing innovative technology in the private sector. IRAP technology grants, and the more generous 35% cash-back SR&ED tax credit, are aimed at small business. Small business is considered by the federal government to be the Engine of Growth in the economy for a number of reasons, including being the most nimble to respond to changing forces, most receptive to new needs and opportunities, and the most cost-conscious (and therefore most efficient).

Innovative Technology – SR&ED vs IRAP
In SR&ED, the technological advance need only be slight, and must not be readily available in the public domain, according to official CRA policy. In other words, the innovative technology is viewed in the business context of the firm that conducted the SR&ED. In addition, SR&ED can fund an advanced technology program, as long as the work can be shown to be related to overall technological goals, not only individual projects. Aside from the rules associated with reduced funding of expenditures over the maximum ceilings per filing, there is no ultimate ceiling on the magnitude of SR&ED funding for any taxpayer or total funds available for allocation to any number of taxpayers.

In contrast, IRAP is only permitted to provide technology grants to projects that have no existing counterpart whether proprietary or not. The magnitude of funding to any given company over a given year is also restricted (see IRAP), as is the magnitude of funding to the NRC program itself. This can result in good projects left unfunded because the program funding for the budget year is exhausted.