Saskatchewan Innovation & R&D Tax Credits (2025)
Saskatchewan supports business innovation and technology growth through a combination of provincial tax credits and direct incentives. These programs are designed to encourage R&D, commercialization, and investment in technology-driven enterprises. This guide provides an in-depth look at the Saskatchewan Research and Development Tax Credit, the Technology Startup Incentive (STSI), and how to combine provincial and federal incentives to maximize your company’s refund or cash flow.
1. Saskatchewan Research and Development Tax Credit (SR&ED)
- What is it? A non-refundable provincial tax credit for eligible R&D expenditures performed in Saskatchewan. The credit is modeled after the federal SR&ED program and is claimable alongside the federal credit.
- Current Rate: 10% of eligible expenditures, up to a maximum annual limit (subject to change; always check current Saskatchewan Finance bulletins).
- Eligible Activities: Experimental development, applied research, support work (engineering, design, data collection, etc.), and scientific advancement performed in Saskatchewan.
- Eligible Expenditures: Salaries, materials, contractor costs, overhead, and certain capital expenditures directly related to eligible R&D.
- Who Can Claim: Corporations with a permanent establishment in Saskatchewan incurring eligible SR&ED expenses in the province.
- Claim Process: File Saskatchewan Schedule 403, along with the federal T661 SR&ED forms, as part of your T2 corporate tax return. Track and document all eligible activities and costs thoroughly.
- Stacking with Federal SR&ED: You can claim both the federal and the Saskatchewan SR&ED credits on the same expenditures. Be sure to coordinate claims to avoid double-counting and to maximize your refund.
2. Saskatchewan Technology Startup Incentive (STSI)
- What is it? A refundable 45% tax credit for eligible investments made in early-stage Saskatchewan technology startups. The credit is provided to investors, but startups benefit by attracting capital.
- Eligible Businesses: Must be a qualified technology startup based in Saskatchewan, under 10 years old, carrying on business primarily in the tech sector (software, IT, life sciences, cleantech, etc.), and meeting payroll/ownership criteria.
- Eligible Investments: Must be cash investments by approved eligible investors, up to a per-company and per-investor cap. Pre-approval by Innovation Saskatchewan is required before investments are made.
- Who Can Apply: Startups apply to have their business and investors approved. Investors claim the STSI tax credit on their Saskatchewan personal or corporate return.
- Claim Process: Pre-register via Innovation Saskatchewan, complete investment and compliance requirements, and receive a tax credit certificate to include with your return.
3. Stacking with Federal Innovation Incentives
Saskatchewan’s innovation credits are designed to work alongside the federal SR&ED program and other federal innovation grants or loans. Key points:
- SR&ED expenditures performed in Saskatchewan can generally be claimed for both the federal and Saskatchewan credits.
- Federal innovation grants (e.g. IRAP, CanExport) may impact eligible expenses, so coordinate claims carefully.
- Saskatchewan startup grants and loans (e.g. Innovation Saskatchewan programs) may also be available in addition to tax credits.
Pro Tip: Many Saskatchewan R&D and innovation credits are time-sensitive and require early documentation. Start tracking eligibility as soon as a project begins.