Words and Phrases - "manufacturing or processing"

A foreign affiliate of a Canadian manufacturing company (the taxpayer) provided services to the taxpayer of testing prototypes (manufactured by the taxpayer) of goods that would subsequently be manufactured and sold by the taxpayer. In finding that the testing activities, viewed as scientific research and experimental development, did not qualify as manufacturing or processing notwithstanding the inclusion of such activities in the definition of "qualified activities" in Reg. 5202, the Directorate noted that as "it required a positive act of the legislator, namely their inclusion in the ITR" for such activities to be included in manufacturing or processing, this implied that the unadorned expression in s. 95(3)(d) did not include SR&ED. See summary under s. 95(3)(b).