NRC IRAP and SR&ED are the two pillars of Canadian R&D funding — and the question we’re asked most is “which one?” The honest answer is usually both. But they work so differently that the order you apply in directly affects your cash flow.
The difference at a glance
Choose IRAP when…
Choose SR&ED when…
Most R&D companies use both: IRAP funds the work as you spend it, then SR&ED refunds a share of what IRAP didn’t cover when you file. IRAP-funded firms see about 33% average revenue growth — but the funding is competitive and capacity-limited, so apply early.
The stacking order that protects your cash
Because IRAP is government assistance, every dollar it contributes reduces your SR&ED-eligible base. That isn’t a reason to skip IRAP — its cash arrives during the project, when you need it most. The right sequence is to secure IRAP first, draw it as you spend, then claim SR&ED on the remaining eligible costs at filing. Done in that order, the two programs compound instead of cannibalizing each other.
