The Canada Revenue Agency has recently released the most current summary of provincial and territorial R&D tax credits. Recent program developments by region include:
Manitoba
- As of January 1, 2014, the definition of ‘eligible expenditures’ has been amended in line with the federal reduction in the prescribed proxy amount to 55%, and the reduction to 80% for contract payments (except contract payments to eligible educational institutions in Manitoba); however, despite the elimination of capital expenditures from the federal tax credit, these costs remain eligible under the Manitoba tax credit.
- Currently, non-refundable tax credits can be carried back 3 years. Non-refundable tax credits can be carried forward 10 years for tax years ended after 2003 or 7 years for tax years ended before 2004 and applied against the Manitoba income taxes payable. The Manitoba 2015-2016 Budget and Bill 36 propose to extend the carry forward period for non-refundable tax credits to 20 years for tax years ended after 2005.
Saskatchewan
- The Saskatchewan non-refundable R&D tax credit rate was reduced from 15% to 10% for all eligible expenditures after March 31, 2015.
British Columbia
- Credit has been extended three years to September 1, 2017.
Quebec
- As per Quebec’s 2014 budget, all R&D tax credit rates were reduced by 20% for all eligible expenditures incurred after June 4, 2014.
- A minimum expenditure threshold has been implemented for fiscal years beginning on or after December 3, 2014. With corporate assets below $50 million in the previous year, the first $50,000 of R&D is excluded from eligibility. This minimum threshold will increase linearly up to $225,000 for corporations with assets of $75 million or more in the previous year.
- All R&D credits (including pre-competitive research, university and public institute research, and research consortium contributions/ rights) have been standardized with the R&D wage tax credit for fiscal years beginning on or after December 3, 2014 to a base rate of 14% (CCPCs with assets below $50 million will qualify for a rate of 30% on the first $3 million of eligible expenditures).
- In line with amendments to the federal SR&ED tax credit, capital expenditures incurred after 2013 are not eligible. In addition, claims filed after 2013 will be subject to a $1,000 penalty for missing, incomplete, or inaccurate information.
- As of June 4, 2014, the 10% increase in the R&D wage tax credit for biopharmaceutical corporations is eliminated (previously qualified corporations will continue to receive the benefit at a decreased rate of 8%)
The following table provides a breakdown of provincial R&D tax credits as of June 30, 2015.
| Province/ Program | Rate | Deadline |
| Newfoundland and Labrador | 15% refundable | 12 months after year end |
| Nova Scotia | 15% refundable | 18 months after year end |
| New Brunswick | 15% refundable (expenditures incurred after 2003)10% non-refundable (expenditures incurred before 2003) | N/A |
| Manitoba | 20% non-refundable (expenditures incurred after March 8, 2005)15% non-refundable (expenditures incurred before March 9, 2005); however, the 2010 Budget extended refundability of the Manitoba R&D tax credit to one-half of eligible expenditures for in-house R&D expenditures not undertaken by an institute in Manitoba and incurred after 2012) | 12 months after year end |
| Saskatchewan | 10% non refundable (expenditures after March 31, 2015)15% refundable for all eligible expenditures occurring between March 19, 2009 and March 31, 2012 | N/A |
| Alberta | 10% refundable (on up to $4 million in eligible expenses) | 15 months after year end |
| British Columbia | 10% non-refundable; refundable for CCPCs up to 10% of the expenditure limit | 18 months after year end |
| Yukon | 15% refundable | 12 months after year end |
| Ontario Innovation Tax Credit (OITC) | 10% refundable (annual expenditure limit of $3M: Phased out if taxable paid-up capital (PUC) for previous year exceeds $25M or is between $500,000 to $800,000; expenditure limit is eliminated when PUC reaches $50M) | N/A |
| Ontario Business-Research Institute Tax Credit (OBRITC) | 20% refundable (qualified expenditures are capped at $20 million annually among associated group of corporations) | N/A |
| Ontario Research and Development Tax Credit (ORDTC) | 4.5% non-refundable | N/A |
| Quebec R&D Wage tax credit; Tax credit on fees paid to a research consortium; Precompetitive tax credits |
14% to 30% (after June 4, 2014)17.5% to 37.5% for costs incurred between April 22, 2005 to June 4, 2014 | N/A |
