Since we reported on the federal government’s Scientific Research and Experimental Development program two months ago, we’ve heard a strong message from several Atlantic Canadian entrepreneurs. They’re angry at that their claims under the program are either being denied or held up in an appeal process that is taking too long to settle. The word “anger” may understate the sentiment. There’s a certain fury around this issue that is unlike anything I’ve witnessed in the three-and-a-half years I’ve been covering Atlantic Canadian startups.

To recap, we reported on Nov. 27 that several Atlantic Canadian startups had their SR&ED claims rejected completely, even though they received at least part of their claim in previous years. These claims often amount to hundreds of thousands of dollars.

The program administered by the Canadian Revenue Agency has long been used by small and large Canadian companies to finance research and development. However, several entrepreneurs said they have been denied funding in 2014, even though their applications were successful in previous years.

The program allows Canadian businesses — from startups to multinationals — to claim back money for their research and development spending when they file corporate income taxes. In other words, if a company spends a certain amount on scientific research, it can claim for that on tax returns with the hope to receive some money back from CRA. Companies can make claims even if they don’t yet have sales, and therefore don’t pay corporate taxes.

In reporting the SR&ED controversy, we aimed to be as balanced as possible, seeking the views from a range of players and getting a response from CRA. The article drew a strong reaction. By far the strongest were from people outraged that their claims had been denied or ensnared in the review process.

One New Brunswick entrepreneur said that his company had to wait 542 days for the successful completion of its appeal for SR&ED funding.

Another startup from Nova Scotia has been going through the process for 18 months and still has not yet had the matter resolved. The CEO of the company pointed out that lower SR&ED claims affect startups’ ability to tap provincial programs, so the effects are amplified by not receiving provincial funding.

A lot of entrepreneurs told us they are convinced CRA is applying far more stringent criteria to applications from Atlantic Canadian businesses than from those in other parts of the country. Some founders even said they are making SR&ED claims wherever possible through units or partners in other parts of the country to increase their chances of approval. When asked about this, a CRA spokesperson said the agency always strives for consistency in assessing claims from across the country and has actually strengthened its consistency.

Finally, it’s difficult to say whether the situation will improve in 2014. People familiar with the matter say representatives of the East Coast startup community have met with senior CRA officials. The concerns have been spelled out clearly. The result probably won’t be known until companies begin to make their claims for the 2014-15 tax year.