Global Sustainable Solutions V Canada

6398316 Canada Inc. v. Her Majesty The Queen, docket number 2018-528(IT)G, in the Tax Court of Canada.


Global Sustainable Solutions filed for an SR&ED credit of nearly $38,000 in scientific research based on their implementation of energy-efficient housing in the 2012 and 2013 tax years. This claim was called into question and brought to the Tax Court of Canada, as it was seen that the house was built using existing technology and materials.

Basic Facts

The R&D tax credit is granted for research that advances the fields of science and technology. Even if the projects are unsuccessful, an attempt at advancing the fields must be made. 

Global built a house in southern Ontario, working to create a uniquely energy-efficient custom design. They aimed to make this house not dependent on public utilities by increasing insulation, increasing sun exposure and increasing sealing tapes to lower heat loss. They also claimed to test different concrete formulas to find which best retained heat.

The minister of national revenue rejected the claim, based on the grounds that Global had used existing technology and did not develop anything new or innovative.

Court Decision

The Tax Court went through a five part test to assess the claim’s validity. Parts 1 and 2 assessed if the expenditures were connected to a problem that could not be solved by current engineering practices and for a new technology to address it. The court argued that Global used existing technologies in existing combinations to reduce heat transfer, therefore not passing the first two parts.

The third part assessed whether any scientific methods to test and evaluate new technology were applied. The court decided Global had implemented simple trial and error – a method that is excluded from SR&ED qualifying research. The fourth and fifth part tested if a technological advance had been achieved and if a scientific methodology was used. The court did not believe either of these had been met.

After failing to meet all 5 parts in the courts eyes, the court deemed all expenses unrelated to SR&ED and the credit was rejected.


Assessing your SR&ED before claiming a credit is critical. The legislation is very particular and can be hard to flesh out without experience. SR&ED tax specialists can help to assess if you qualify for the credit prior to claiming and better protect you from going to Tax Court.

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