When it comes to production runs, you have the opportunity to claim materials used during the process as part of your SR&ED expenses. However, certain steps must be taken to do so:

Identifying Eligible Production Runs

First, you need to determine that the production run is eligible for SR&ED. This entails identifying the specific section of the commercial facility involved in the production runs and establishing a clear rationale for the part of the production line or process related to the SR&ED.

Documentation and Evidence

Next, you must identify the duration of each production run, the personnel involved in the SR&ED, and the materials used. Additionally, you should maintain evidence of a technical risk, such as uncertainty about the material's outcome or equipment damage. This evidence can take the form of logbooks, meeting minutes, or daily reports.

It's essential to note that the production run must be considered experimental development resulting in experimental production (ED+EP) or experimental development in conjunction with commercial production (ED+CP). In the first case, you may be attempting to prove that your advancements can be applied in production. In the second case, you may be making changes to your processes during commercial production to mitigate any negative effects on the material, as long as it doesn't pose a risk to the process or product.

However, in this scenario, you can only claim SR&ED expenses not directly related to creating a salable product, and you'll need to allocate costs between SR&ED and non-SR&ED work.