The reviews and audits page covers the law: assessment, penalties, objections and the Tax Court. This page is about practice: how the CRA's SR&ED directorate processes and reviews claims today, what its reviewers ask and in what order, and how a company prepares. Two features distinguish Canada. Reviews happen before assessment, so the refund waits on them; and the technical reviewer is a scientist or engineer applying a published manual.
What it is
| Stage | What happens | Timing |
|---|---|---|
| Receipt and risk assessment | The claim is checked for completeness and risk-scored; low-risk claims are accepted as filed | Within weeks of filing |
| Accepted as filed | Assessed and any refund paid | Service standard of 60 calendar days for refundable claims |
| Selected for review | Financial review, technical review or coordinated review; first contact letter sets out the scope and information requested | Service standard of 180 calendar days |
| Technical review | Research and Technology Advisor reviews the Part 2 descriptions and evidence, usually with a site visit or video interview of the technical staff | Weeks to months |
| Financial review | Financial Reviewer tests expenditures, allocations, method and reductions against records | Often concurrent |
| Preliminary findings | Reviewers communicate proposed conclusions and invite a response | Before the report |
| Review report and assessment | SR&ED review report issued; claim assessed; refund paid on the allowed amount | End of review |
| Disagreement | Discussion with the manager; administrative second review; then objection | Before or after assessment |
Who it applies to
Every claimant is risk-assessed; a minority is reviewed. The CRA does not publish its selection model, but its manual and its communications point to the drivers: first-time claimants, claims that change size sharply, sectors with historically high adjustment rates such as software and food processing, preparers with poor track records, and narratives that describe business goals rather than technological uncertainty. First-time claimants may be offered a First-Time Claimant Advisory Service visit, an educational review that explains the program without assessing the claim.
Pre-claim approval. Optional, and available since 1 April 2026, to have planned work assessed before you incur most of the cost. It replaces the uncertainty of a post-filing technical review with a decision in advance, and suits large projects, novel fields and companies whose funding depends on the refund. The application describes the planned projects in the same terms as Part 2 of the T661 and the CRA responds with a determination the company can rely on for the work as described.
How it works
The technical review. The RTA reads the three Part 2 answers for each project and asks three things: was there a technological uncertainty, was the work a systematic investigation, and how much of the claimed work was SR&ED rather than commercial activity. The manual requires the RTA to gather the facts, including through interviews, to apply the eligibility guidelines, to explain preliminary findings and to document the determination project by project in the review report. The interview is the pivot. The RTA wants to hear the engineer or scientist describe what was unknown and what was tried; a preparer who answers for them weakens the claim.
The financial review. The FR ties Part 3 and Part 5 to payroll, timesheets, invoices and contracts; checks specified employee treatment, the 80% contract rule, assistance and provincial credits, and the proxy or traditional calculation; and confirms CCPC status, the associated group and the expenditure limit. Where the RTA reduces a project's eligible extent, the FR reduces its costs to match.
Disagreeing. Respond to the preliminary findings in writing with evidence. If the technical determination still seems wrong, ask for a discussion with the RTA's manager, then request an administrative second review by a different RTA, which is available before the assessment issues. After assessment, the route is a notice of objection.
Worked example
Illustrative example. Thunder Bay Materials Inc., a hypothetical first-time CCPC claimant, files a T661 with two projects and C$450,000 of qualified expenditures in April. In May the CRA writes proposing a coordinated review and asks for the project records, timesheets and payroll. In June the RTA and FR visit. The materials scientist walks the RTA through the furnace trial logs for project one, and the RTA accepts it. For project two, described as "scale-up of the coating line", the records show commissioning of purchased equipment; the RTA's preliminary finding is that only the trials of the new cure schedule, about a third of the project, were SR&ED. Thunder Bay agrees, and the FR reduces that project's costs accordingly. The review report issues in August; the claim is assessed at C$350,000 of qualified expenditures and the C$122,500 refund is paid, inside the 180-day standard. The following year Thunder Bay applies for pre-claim approval of its new project before the work starts.
Common questions
Will the refund be paid while the review is open? No. Refundable claims under review are paid on assessment after the review.
Can the RTA deny a project without meeting us? The manual requires the RTA to gather facts and communicate preliminary findings; insist on the interview and respond in writing.
Does a reviewed and accepted claim protect later years? No. Each year is assessed on its own; only pre-claim approval binds in advance.
Should our preparer attend? Yes, to manage the process, but the technical staff should answer the technical questions.
Related pages
Official sources
Educational content only, not tax advice. See the disclaimer.