Canafric operated a food manufacturing business specializing in developing frozen pies for grocery chains and restaurants. Customers would request a product with specific targets, such as content (e.g., low fat and salt, or halal), shelf life (e.g., without preservatives), taste acceptability and texture. Canafric averaged around six projects a year in which it would elaborate a recipe designed to meet the client’s requirements, test the recipe and send the sample product to a “taste panel” for evaluation – and evaluate the reasons for any failure.
The CRA technical advisor considered that each breakthrough made was transferrable from one product to the other so that most of the projects lacked technological uncertainty. In rejecting this view and before finding that all of the SR&ED claims at issue were to be allowed, Rossiter C.J. stated (at para. 94) that the CEO “clearly demonstrated that this was not the case because the ingredients will react differently when used in different products.” Regarding two of the projects where the CRA technical advisor considered there to be insufficient documentation, Rossiter C.J stated (at para. 110):
Documentary evidence is not mandatory. Testimonial evidence may be presented in support of a claim. In this case, Canafric provided both documentary and testimonial evidence in support of its various claims.
More generally, all five criteria established in Northwest Hydraulics were met.