The case of Formadrain Inc. v. The Queen, 2017 CCI 42, recently determined that a new approach to making tubing used in repairing drains involved SR&ED.
The Crown argued that the project’s technological uncertainty was “entirely in the chemical composition of the material [forming the mandrel], a task which was delegated to a rubber manufacturer,” but Justice D’Auray referred to paragraph 248(1)(d) contemplated work delegated to others provided that work was done in Canada. The Court found that the taxpayer’s employees were too systematic for their work to be rightly called “trial and error”. They had kept detailed notes of the tests that had been planned and also the results of these tests.
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