Leveraging the SR&ED Program for Natural Gas Innovation in Canada’s Trucking Industry

Natural Gas Innovation

SR&ED Program for Natural Gas Innovation

Air pollution remains one of the biggest threats to humanity, even in developed countries like Canada. It impacts health, the environment, infrastructures, and the economy.

There is a laundry list of hazards that come with chronic exposure to contaminated air. It can compromise the lungs and increase the risk for susceptible people. It can cause eye, nose, and throat irritations.

Even healthy individuals can experience reduced exercise capacity, impaired vision, and weakened manual dexterity if carbon monoxide makes its way to the bloodstream.

There are many ways that air pollution can affect the lives of Canadians. And its role in climate change has not even been discussed here yet.
That is why the government is taking countless measures to reduce air pollution in the country. These include environmental regulations that raise the standards for carbon emissions and accelerate the transition from coal-fired electricity.

The government also has several programs in place to help innovative businesses advance clean technology in Canada. First among them is the Scientific Research and Experimental Development or SR&ED.

SR&ED Grants Canada for Clean Air

Innovative ideas are being generated every day in Canada, but there are many barriers preventing them from being realized. The goal of the SR&ED program is to remove these barriers and make it easier for Canadian businesses to innovate.

SR&ED is a federal tax incentive program supporting research and experimental development activities among innovative businesses. These include clean tech and sustainable technologies like natural gas utilization.

Businesses with eligible SR&ED projects can receive tax incentives for related costs. These can come as income tax deductions or as an investment tax credit.

The eligibility criteria are more focused on the merits of the project instead of the nature of the business, so all Canadian controlled private corporations or CCPCs from any industry can apply.

As long as the company is engaged in a research and development R&D project designed to solve an existing scientific and technological uncertainty, it can qualify under the SR&ED tax credits.

Also, the project must involve a systematic investigation with a high potential for technological advancements.

Applicants that qualify for SR&ED funding can earn up to 35% in refundable SR&ED tax credit for the first $3 million of qualifying expenditures and 15% non-refundable ITC for the excess amount.

Canadian companies that are also eligible under the Canada Revenue Agency’s criteria can get up to 15% ITC for eligible costs over $3 million, 40% of which can be refunded.

Other corporations, partnerships, proprietorships, and trusts can also apply for SR&ED tax incentives. Those with qualified SR&ED projects can get SR&ED funding of up to 15% ITC for all SR&ED-related costs. This can be deducted from the tax payable for the fiscal year.

Qualifying expenditures include the wages for all employees working on the SR&ED project, materials used during the process, some overhead costs, and payment for contractors. The SR&ED funding is an entitlement to qualified projects, and the SR&ED claim can be submitted once they are completed.

The SR&ED program has been instrumental in Canada’s fight against air pollution. It processes over 18,000 claims every year from businesses across all sectors, allowing them to pursue R&D activities that help ensure access to clean air, water, and soil for generations to come.

If you want to know more about SR&ED, our funding specialists here at EVAMAX can help you.

Reducing Carbon Emission in the Trucking Industry

A great example of clean tech innovation is the research being done by Hiller Truck Tech or HTT on dual-engine technology for heavy-duty trucks. This one-year project aims to replace diesel with natural gas as a primary source of fuel for the trucking industry. If this succeeds, it will reduce the transportation sector’s carbon footprint significantly.

The Importance of Natural Gas in the Trucking Sector

The transportation industry has long been considered a key driver of air pollution. This includes the delivery of goods and materials using heavy-duty vehicles, which is critical in every product supply chain. The majority of the energy used by this sector today still comes from fossil fuels, which is a cause of great concern for obvious reasons.

For the trucking industry, the solution lies in a more robust utilization of natural gas. HTT’s ongoing study fits in this scenario perfectly. It will go a long way in addressing the risk presented by fossil fuels and could possibly lead to significant fuel cost savings.

Hiller Truck Tech Company Overview

Hiller Truck Tech is an Ontario-based engineering company specializing in improvements and performance enhancements for the trucking industry. It offers products and services that can help businesses reduce the operating costs and emissions from their fleets. Remote internet tuning and anti-idle products are only some of their wide range of solutions.

Since it was established in 2004, HTT has become a leader in displacing diesel in favor of natural gas in heavy-duty vehicles. This includes both 100% natural gas and dual-fuel options. They have also developed a reputation for making heavy-duty vehicles leaner and cleaner.

Hiller Truck Tech’s Innovative Dual-Fuel Engine

HTT is attempting to convert two diesel truck engines into dual-fuel vehicles that can accommodate both diesel and natural gas. What is more, they plan to integrate modifications that will enhance the performance of the vehicle.

The resulting technology will reduce greenhouse gas emissions from heavy-duty trucks by 15% to 20% and particulate matter emissions by more than 90%.

For this project, HTT received $250,000 worth of funding from the Natural Gas Innovation Fund or NGIF. NGIF was created by the Canada Gas Association, an organization consisting of distribution companies, equipment manufacturers, and other service providers in the natural gas industry.

Aside from the NGIF, HTT also received contributions from the National Research Council, Transport Canada, the University of Toronto, and other organizations. This is also the type of project that qualifies for SR&ED funding.

If you want to know more about the SR&ED program and how it can help businesses advance clean tech, you can talk to our funding specialists here at EVAMAX.

EVAMAX specializes in innovative government grants like SR&ED and IRAP funding. We have served over 900 clients, helping them access over $115 million worth of government funds.

For an obligation-free consultation, give us a call or schedule an appointment through our website.

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