‘Maximization’ is an often used term in the SR&ED industry but what does it mean? 

Ultimately, to maximize a SR&ED claim a claimant has to justify the largest pool of eligible expenditures possible.   The size of the expenditure pool depends, almost entirely, on the arguments presented in the SR&ED Technical Report (which are particular ways of viewing the work conducted, as defined by the legislation).  

Typically, there are two approaches that a claimant can adopt when preparing the SR&ED Technical Report (and the arguments contained therein).

In the ‘Spaghetti’ approach, the consultant prepares their SR&ED Technical reports by including as many projects and arguments as possible for eligibility in the hope that some or all will stick with the CRA.  In this approach, as well, the consultant is focused on minimizing the client’s time (and, of course, the time spent by their staff).   This approach used to yield a high return on investment when the CRA was interpreting the eligibility criteria more broadly than they are now.  Since the interpretation (of what constitutes technological advancement) has narrowed in recent years, this approach no longer yields a high return on investment.   Also, since the consultant is focused on minimizing the time spent in the preparation of a claim, this approach often leads to missed eligible work.  More significantly, as the CRA narrows its interpretation of the legislation, this approach yields more onerous Technical Reviews and is often becomes a source of disagreement and misunderstanding between CRA and claimants. 

In the ‘Lowest Hanging Fruit’ approach, the consultant is focused on minimizing the time spent in preparation of the SR&ED claim (both on behalf of the client and of the consultant’s staff) and, in the course of 1-3 interviews in total, only identifies projects which obviously meet the criteria for eligibility.  The SR&ED Technical report is prepared by including the first argument(s) for eligibility (however strong or weak) that they find for a given a project.  This approach yields the lowest return on investment for time spent in SR&ED because, in the vast majority of cases, eligible work is missed and the first argument(s) found for eligibility aren’t always the strongest.