How to write your project description for Form T661
When claiming the SR&ED Investment Tax Credit (ITC) you have to fill out Form T661, Scientific Research and Experimental Development (SR&ED) Expenditures Claim, and submit it with your tax return. On Form T661, you must describe your work by answering questions on lines 242, 244, and 246 for each project.
To help you answer these questions, the CRA has broken them down into simpler questions. These simpler questions are in the Pre-claim SR&ED Workbook, available in My Business Account under “Corporation Income Tax.”
Below are sector-specific examples of project descriptions using the broken down questions for lines 242, 244, and 246.
Plant production
Line 242: What scientific or technological uncertainties did you attempt to overcome? (Maximum 350 words)
Describe your business and provide some background on your regular commercial activities.
Our business has been producing strawberries for over 30 years. The owner works full time on the farm and we have other employees. An agronomist is hired on a contractual basis as support for commercial production and R&D projects. We are continually looking for ways to improve our strawberry production.
What was the objective of the work you want to claim?
Our employees observed symptoms of black root rot (BRR) during the last two years of production, that was previously unreported on the farm, and a lab confirmed the diagnosis.
Our objective was to understand the occurrence of BRR disease symptoms in strawberry plants among different fields and determine cultural practices that could be applied to control this pathogen that do not involve the use of conventional pesticides.
Explain why the available solutions/knowledge did not meet your needs.
We consulted our employees and agronomist, and searched the literature available on the internet. We were looking for information that would have expanded our ability to understand the noted occurrences of BRR and to identify potential cultural practices that could be adopted to meet our needs. We found out that the available knowledge did not address the variations in the development of BRR of fields from the same area. Also, the available solutions were only related to the control of BRR through the application of conventional pesticides, and therefore did not meet our objective to have solutions for an organic production.
The agronomist analysed the preliminary data collected by our employees. This analysis showed that the symptoms of BRR were correlated with particular fields, rather than strawberry cultivars. We could not find explanations on why the disease would develop in some fields only. We wanted to be able to explain that observation and see how this new knowledge could be used in reducing the occurrence of BRR in our fields without the use of conventional pesticides.
Line 244: What work did you perform in the tax year to overcome the scientific or technological uncertainties described in line 242? (Maximum 700 words)
Describe what idea(s) you came up with that served as a starting point to overcome the limitations you faced.
We decided to work with a researcher specializing in strawberry diseases. We described to him our observations on the occurrence of BRR in strawberry plants among our fields. Then, the researcher identified a possible explanation for the differences in development of the disease among the different fields.
To validate this potential explanation, we formulated two ideas. The first was that:
- The microbial population of soils from fields with plants free of BRR symptoms is larger and more diverse compared to soils from fields with plants showing significant symptoms of BRR.
The second idea was that:
- This larger and more diverse microbial population confers a natural ability to the soil to suppress BRR.
Describe the work you did to overcome the limitations described on line 242.
In collaboration with the researcher, we developed a protocol for a three phase project.
In the first phase, we wanted to determine if the soil-borne pathogen related to BRR was present in all the fields of the farm where strawberries are grown. We took a representative set of soil samples and analysed it. Results showed that the pathogen is present in the soil of all the fields where strawberries are grown. This confirmed that the absence of symptoms of BRR in plants in some of the fields is not due to the absence of the pathogen. We then wanted to validate if micro-organisms of these soils may be influencing whether the strawberry plants become infected.
The aim of the second phase of the project was to characterize the soil microbiology of our fields. The researcher carried out a complete microbial analysis of a representative set of soil samples in a University laboratory to characterize the soil composition in terms of bacteria and fungi. Results showed that in fields with plants where no BRR symptoms were observed, the soil showed a large and diverse microbial population compared to fields where significant symptoms of BRR were observed. These results validated our first idea.
Then the researcher proceeded to phase three of the protocol to validate our second idea on the ability of some of our soils to inhibit the development of BRR. He conducted a trial in an experimental greenhouse with strawberry plants grown in pots, each filled with different soils from our farm. The pathogen was inoculated into each pot and the development of BRR in the plants was compared among the different soils. The results showed that symptoms were appearing only in plants grown in soils with low microbial diversity. This validated our second idea; soils with high microbial diversity suppress the pathogen related to BRR, whereas other soils are conducive to the pathogen.
What data or feedback did you collect?
- Field soil analyses for soil-borne pathogen related to BRR
- Complete field soil microbial analyses: identification and quantification of bacteria and fungi
- Symptoms of BRR on strawberry plants grown in pots
Line 246: What scientific or technological advancements did you achieve or attempt to achieve as a result of the work described in line 244? (Maximum 350 words)
Describe the advancement in scientific knowledge you achieved from your work.
We gained an understanding of the soil characteristics, in terms of microbial density, composition, and diversity, that inhibits the development of BRR. We can now explain that the differences in BRR development is due to suppressive soils in some of our fields.
We can now benefit from that new knowledge and avoid the use of conventional pesticides. In future, a simple soil microbial analysis will allow us to:
- Identify the fields with soil that inhibits the development of BRR in strawberry plants
- Grow the right crop in the right field, depending on the suppressive capacity of soils
Information and communication technology (ICT)
Line 242: What scientific or technological uncertainties did you attempt to overcome? (Maximum 350 words)
Describe your business and provide some background on your regular commercial activities.
We are specialized in the social media field. Our existing Social Media Platform (SMP) was developed to allow users to gain cash rewards based on their contributions.
What was the objective of the work you want to claim?
We seek to expand our platform to enable rewarding our customers using cryptocurrency. For better market share, our objective was to develop a new cryptocurrency (ccCoin) which will be more energy efficient than the existing cryptocurrencies.
Explain why the available solutions/knowledge did not meet your needs.
Cryptocurrencies rely on Blockchain networks and use consensus mechanisms to validate financial transactions. Existing Proof of Work (PoW) consensus mechanism guarantees a fair distribution of mining chances but it suffers from an overall energy consumption issue since the validation operations are duplicated.
Enhancements to this consensus mechanism (e.g. using mining pools) or alternative mechanisms, such as Proof of Stake (PoS), can reduce the number of redundant operations, but result in a monopoly in terms of validation chances among miners.
We seek to achieve at least 30% reduction in the overall energy consumption without degrading fairness among miners. To do so, we thought about augmenting PoW by adding probabilistic behaviour to limit the access to transactions validation.
We found that the backoff mechanism, used in wireless networks (WLANs) for medium access control, may be a candidate for such objective. This mechanism uses random timers to grant access to the channel in a distributed fashion while reducing the collision rate. Overall, all the nodes have equal chance to access the channel. Also, this mechanism adapts very well to network congestion.
Line 244: What work did you perform in the tax year to overcome the scientific or technological uncertainties described in line 242? (Maximum 700 words)
Describe what hypothesis, idea, or potential solution you came up with.
Our idea was to transpose such behavior into Blockchain. Collisions (concurrent transmissions) in WLANs will mean duplicate validations in Blockchain. But, the backoff mechanism cannot be directly applied to Blockchain because, in WLANs, this mechanism is designed to share access to one channel, whereas in Blockchain we can have multiple transaction validations occurring simultaneously. Also, once a transaction is validated, there is no need for the backoff mechanism to be associated to this specific transaction.
Therefore, there is uncertainty in whether the backoff mechanism principles can be adapted to the specific nature of Blockchain networks and achieve the objective of processing transactions with minimal duplicates while keeping fairness among the nodes.
Describe the work you did to test your hypothesis, idea, or potential solution.
From September to January, we thought about ways to apply the backoff mechanism principles to the overall Blockchain network. One candidate solution was to create a variant of the backoff mechanism in which, when a new transaction is ready for validation, each set of nodes willing to validate that specific transaction will be considered as a separate channel and have a specific backoff mechanism attached to them. Thus, at a given point in time, multiple dynamic instances of the backoff mechanism will be running in parallel. Moreover, in WLANs, the backoff mechanism relies on the capability of carrier sensing (CS) to perform its elementary timer operations, meaning that wireless nodes are able to sense if there is nearby activity. In Blockchain, which relies on Peer-to-Peer (P2P) topology, there is no way for a node to get a sense about the activity of the other nodes. We thought about how we can emulate the lacking CS capability in P2P to allow miners to be informed about other mining activities. This is key to applying the principles of backoff mechanism to achieve our objectives.
Our idea was to create “regions” of miners allowing them to detect the level of localized mining activities within their neighborhood (a specific number of hops) and correctly apply the backoff timers operations only if the activity is related to the same transaction they want to validate. The optimal neighborhood size has to be determined since the propagation of such information within a small neighborhood will result in less accurate emulation of CS, thus more collisions (respectively larger network messages overhead and bigger delays due to routing). We wanted to validate through simulation the effectiveness of the use of the backoff mechanism as an enhancement to PoW. We called our new consensus mechanism Fairness of Work (FoW). We designed minimalistic models of PoW and FoW and implemented them in an open-source discrete-event simulator. We defined parameters that will be used for input such as the number of nodes, the degree of dynamicity (joins/leaves) of the P2P network, the number of operations to validate, the neighborhood size, etc. We also defined the performance metrics for evaluation of FoW against PoW, such as the number of redundant mining operations, the distribution of mining among the nodes and message overhead. We then conducted many simulations, for both PoW and FoW. Simulation results showed that the overall number of redundant mining operations was reduced by 40% while keeping a fair distribution of mining chance between miners. The performance of FoW starts to degrade when the size of the Blockchain network exceeds 200,000 nodes.
From February to June, we modified an open source Blockchain software client to include our new FoW mechanism. Then, we tested this mechanism using a small network in a real-world setting. Results were similar to simulation results, which validated the models used in the simulation and allowed us to create a model for PoS and run simulations to compare FoW against PoS without real-world settings. Earlier work related to the integration of SMP with ccCoin and benchmarking of hardware mining devices to select the best candidate in terms of energy consumption was not claimed.
Line 246: What scientific or technological advancements did you achieve or attempt to achieve as a result of the work described in line 244? (Maximum 350 words)
Describe the technological advancement you achieved from your work.
We have shown that the principles of the backoff mechanism, used for medium access control in WLANs to reduce frame collisions, can be applied to reduce energy consumption in Blockchain without creating mining monopoly.
We have found that dynamic instances of this mechanism can run in parallel and achieve the desired results. Also, it is possible to rely on partial information about transaction validation within regions of miners to emulate the carrier sensing capability. By combining both ideas, it is possible to reduce the number of mining operations within the overall Blockchain network.
Analysis of our experimental results shows that we can successfully reduce the amount of redundant mining operations by 40% while having a fair distribution of mining chance among miners. Our new mechanism, FoW, outperforms both the legacy PoW and PoS.
However, the results show that our FoW mechanism does not scale well for large Blockchain networks (beyond 200,000 active miners) due to the nonconvergence of the propagation mechanism introduced to emulate the lack of carrier sensing capability. Increasing the propagation radius can possibly solve this problem for networks with low degree of dynamicity (join/leave).
- Form T2SCH31 Investment Tax Credit - Corporations or Form T2038-IND Investment Tax Credit (Individuals) must also be submitted to claim the SR&ED ITC.
- The project description examples are for your guidance only. The information you provide on Form T661 must be accurate, true, original, and not copied from other sources. False or inaccurate claims, including plagiarism, may result in claim disallowance, penalties, or other enforcement actions.