Alberta corporations that invest in research and development just picked up materially more room under the federal Scientific Research and Experimental Development (SR&ED) program — and the timing means many are only now working through what it changes on their current-year T2 and AT1 filings. Bill C-15, the Budget 2025 Implementation Act, No. 1, received Royal Assent on March 26, 2026, and its SR&ED amendments apply retroactively to tax years starting on or after December 16, 2024. For a corporation with a fiscal year that began anytime after that date, this is not a future planning item — it is already in effect for a return that may be filed this fall.
Source: Parliament of Canada — Bill C-15, Royal Assent.
The federal change is significant on its own. But because Alberta layers its own Innovation Employment Grant (IEG) on top of the same SR&ED-eligible expenditure base, Alberta corporations need to look at both programs together — and understand that the province's own limits did not move in step with Ottawa's.
What Bill C-15 actually changed
The amendments enacted through Bill C-15 raise the annual expenditure limit eligible for the enhanced 35% refundable SR&ED investment tax credit — available to Canadian-controlled private corporations (CCPCs) — from $3 million to $6 million, effectively doubling the maximum refundable credit available to a CCPC (or an associated group of CCPCs) from $1.05 million to $2.1 million a year.
Alongside the expenditure limit increase, the legislation also:
- Raises the taxable-capital phase-out band for the enhanced rate from $10 million–$50 million to $15 million–$75 million, so mid-sized corporations that previously lost access to the 35% rate as they grew now retain more of it for longer.
- Extends access to the enhanced refundable rate to certain eligible Canadian public corporations, a group previously limited to the lower 15% non-refundable rate regardless of size.
- Restores the eligibility of capital expenditures — property and certain leasing costs used primarily for SR&ED — for costs incurred on or after December 16, 2024, reversing a restriction that had been in place since 2014.
All of this applies for tax years starting on or after December 16, 2024, which means the increase is already live for a large share of Alberta corporations currently preparing or finalizing returns for a fiscal year that closed earlier in 2026.
Where Alberta's own program comes in
Alberta's Innovation Employment Grant sits on top of — but is administered entirely separately from — the federal SR&ED program. It is an entitlement credit delivered through the corporate tax system, claimed by filing Schedule 29 alongside the Alberta Corporate Income Tax Return (AT1), with no separate application process. The grant pays:
- 8% of a corporation's eligible R&D expenditures incurred in Alberta (for expenditures after December 31, 2020), up to the corporation's expenditure limit for the year, plus
- an additional 12% — for a combined 20% — on the portion of eligible spending that exceeds the corporation's "base level," calculated as the average of the corporation's qualifying R&D spending over the prior two years.
Eligible expenditures for the IEG track the same underlying SR&ED-qualifying costs used federally, verified by the CRA and confirmed by Tax and Revenue Administration (TRA) as having been carried out in Alberta. But the IEG runs its own, separate limits:
- The grant applies to up to $4 million of eligible annual R&D spending — a cap Alberta sets independently of the federal expenditure limit.
- It phases out for corporations with between $10 million and $50 million in taxable capital, and is unavailable entirely above $50 million.
Source: Alberta.ca — Innovation Employment Grant.
The gap Alberta corporations should understand
Because the IEG's $4 million expenditure cap and $10 million–$50 million taxable-capital phase-out are set under Alberta's own Corporate Tax Act rather than pegged to the federal limit, doubling the federal figure does not automatically widen the Alberta grant. As of this writing, Alberta has not announced any adjustment to the IEG's expenditure cap or phase-out band to mirror the new federal $6 million limit or the $15 million–$75 million phase-out range.
The practical effect is a widening gap between the two programs for growing, R&D-intensive Alberta corporations:
- A corporation now spending between $4 million and $6 million on eligible R&D can claim the enhanced 35% federal rate on that entire amount, but the Alberta IEG still only applies to the first $4 million of that spending.
- A corporation with taxable capital between $15 million and $50 million may now retain more of the federal enhanced rate under the wider federal phase-out band, while its Alberta IEG continues to shrink under the narrower, unchanged $10 million–$50 million provincial band — and disappears entirely above $50 million regardless of what the federal rules allow.
Neither of these outcomes is an error to fix; it is simply two programs, set independently, that no longer line up as closely as they once did. But it is exactly the kind of mismatch that is easy to miss if a corporation's R&D tax position is modelled off the federal numbers alone.
What Alberta corporations claiming both programs should do
- Confirm your corporation's actual taxation year start date against December 16, 2024 before assuming the new federal limit applies — the increase is not universal for every 2025 or 2026 filing, only for years starting on or after that date.
- Model the federal and Alberta claims separately rather than assuming the IEG scales with the federal expenditure limit — the $4 million Alberta cap and $10 million–$50 million taxable-capital band have not changed.
- Revisit capital expenditure claims for SR&ED-related property or leasing costs incurred on or after December 16, 2024, now that these are eligible again federally, and confirm with TRA how (or whether) restored capital costs feed into the Alberta IEG base.
- Recalculate your two-year base-spending average carefully if last year's expenditures were unusually high or low — the IEG's enhanced 12% rate depends entirely on spending relative to that average, independent of the federal limit change.
- File Schedule 29 alongside your AT1 even if your federal SR&ED claim increased — the IEG requires its own filing and is not automatically adjusted because a federal limit moved.
If your corporation carries out R&D in Alberta and claims both the federal SR&ED credit and the provincial Innovation Employment Grant, RN Canada's tax and compliance team can help reconcile the two programs against your actual fiscal year and expenditure history. For broader Alberta corporate tax context, see our Alberta Corporate Tax Guide.
Key takeaways
- Bill C-15 received Royal Assent on March 26, 2026, and doubled the federal SR&ED enhanced-rate expenditure limit from $3 million to $6 million, retroactive to tax years starting on or after December 16, 2024.
- The federal taxable-capital phase-out band widened to $15 million–$75 million, and capital expenditures for SR&ED are eligible again for costs incurred on or after December 16, 2024.
- Alberta's Innovation Employment Grant runs on the same eligible-expenditure base but keeps its own $4 million cap and $10 million–$50 million taxable-capital phase-out, neither of which has been adjusted to match the federal change.
- Corporations spending $4–6 million on eligible R&D, or with taxable capital in the $15–50 million range, should model their federal and Alberta claims separately rather than assuming they move together.