New Brunswick Innovation & R&D Tax Credits for Business (2025)
New Brunswick offers valuable tax credits and cash incentives for businesses that invest in innovation, research, and development. These programs are designed to encourage local R&D, support tech growth, and help companies of all sizes—from manufacturing to IT startups—access new funding and reduce their tax bill. Most NB credits are stackable with federal Scientific Research & Experimental Development (SR&ED) incentives, maximizing your refund potential.
Key New Brunswick Innovation & R&D Credits
- New Brunswick Research & Development Tax Credit (NBR&DTC): A non-refundable credit for eligible R&D expenditures carried out in NB. The standard rate is 15% of qualifying expenditures, and it can be carried forward up to 20 years or back 3 years.
- Eligibility: Corporations with a permanent establishment in NB incurring eligible SR&ED expenditures (see below). Both CCPCs and other corporations may qualify.
- Calculation: Credit is 15% of eligible expenditures incurred in NB. If you have insufficient NB tax, unused credits can be carried forward/back.
- Claim Instructions: Complete Schedule 366 (NB Research and Development Tax Credit) plus NB428 with your T2 corporate return. You must also file federal SR&ED forms (T661, Schedule 31). Detailed project documentation is required.
- Federal SR&ED Credit (Stackable): NB businesses can claim federal SR&ED credits on top of the NB R&D tax credit, significantly increasing the total refund for eligible R&D activities.
- Eligibility: Expenditures must qualify under the federal definitions of eligible SR&ED (experimental development, applied/basic research, support work).
- Claim: File T661 and Schedule 31 (SR&ED Expenditures) with your federal T2 return. See our SR&ED Tax Credit Guide for step-by-step help.
- Innovation & Technology Adoption Credits: Occasional NB programs support digital transformation, process innovation, and technology adoption—these are often grant-based and may change annually.
- Eligibility: May include manufacturers, tech startups, IT, and SMEs investing in new systems or technologies. Check with Opportunities NB for current programs.
- Claim: Application-based; may require business case, budget, and description of the innovation project.
Who Is Eligible?
- Corporations with a permanent establishment in New Brunswick.
- Must incur eligible R&D expenditures in NB—salaries, materials, contracts, and overhead related to experimental development, applied research, or basic research.
- Both CCPCs (Canadian-Controlled Private Corporations) and other incorporated businesses may qualify.
How to Claim the NB R&D Credit
- Complete the NB428 and Schedule 366 with your T2 corporate tax return.
- Prepare and file federal SR&ED forms (T661, Schedule 31).
- Prepare detailed supporting documentation for R&D projects (technical descriptions, payroll, expenses, contracts, logs).
- Apply for any innovation grants through Opportunities NB or other agencies, if applicable.
Documentation, Audit-Readiness & Claim Best Practices
- Retain detailed time logs, project plans, technical reports, payroll records, invoices, and proof of all eligible expenditures.
- NB and federal authorities may audit your claim—thorough records are essential.
- Track project milestones, R&D progress, and changes in project scope. Keep supporting documentation organized by project and year.
- For grant or technology adoption programs: maintain proof of application, approval letters, and post-project reports.
- Consult a tax professional for complex, high-value, or first-time claims.
Examples: How NB Innovation Credits Apply
- Startup Tech Company: A Moncton-based CCPC invests $200,000 in software development (employee wages, contractors, cloud services). $125,000 of this qualifies for both SR&ED and NB R&D credit. They receive a 15% NB credit ($18,750) and ~35% federal SR&ED refund ($43,750), totaling $62,500 back.
- Small Manufacturer: A Saint John manufacturer hires two engineers to develop a new automated process. $90,000 in eligible salary/wage costs are claimed. They receive $13,500 from the NB credit and ~$31,500 from federal SR&ED (if a CCPC), for $45,000 total benefit.
- Medium Business (not a CCPC): Qualifies for the 15% NB credit and the lower non-refundable federal SR&ED rate (15%). Still a significant benefit, but no cash refund if no tax owing.
Frequently Asked Questions (FAQ)
Who should claim the NB R&D credit—the parent company or the subsidiary?
The NB R&D credit must be claimed by the entity that incurred the eligible expenditures and has a permanent establishment in New Brunswick. If you have multiple companies, expenses must be properly allocated.
Can I claim both NB and federal SR&ED credits for the same expense?
Yes! The NB R&D credit is stackable with the federal SR&ED program—this is a key advantage.
Is the NB R&D credit refundable?
No—the NB R&D credit is non-refundable, but can be carried forward for up to 20 years or back 3 years.
What is the deadline for claiming?
File your claim with your T2 corporate tax return, within your normal corporate filing deadline. Late claims may be denied.
What if my claim is denied or audited?
You may appeal to the CRA or NB Finance if you disagree with a decision. Having solid documentation and technical reports increases your likelihood of approval.
Explore More New Brunswick Business Credits
- Back to NB Business Credits Directory – Complete NB business incentive directory
- NB Small Business Deduction – Reduced corporate tax rate for small businesses
- Digital Media & Film Credits – Refundable credits for media, gaming, film
- Clean Tech & Manufacturing Credits – Green, manufacturing, and energy credits
- Hiring, Training & Apprenticeship Incentives – Wage subsidies, training, and co-op credits
- Canada-Wide Business Tax Credits – Federal SR&ED and related programs
For more, see: NB R&D Official Info | Federal SR&ED Program