Starting in 2025, Québec is introducing a powerful new incentive for businesses focused on innovation: the Tax Credit for Research, Innovation, and Commercialization (CRIC). Designed to fuel scientific research and support the journey from ideas to market, CRIC is a refundable tax credit that rewards corporations investing in R&D and pre-commercialization activities within Québec.
Here’s a breakdown of what this new tax credit entails and how your business might benefit.
What Is the CRIC?
CRIC is part of a sweeping modernization of Québec’s financial support for innovation. It applies to taxation years beginning after March 25, 2025, and is meant to harmonize and simplify access to funding at various stages of the innovation cycle.
It replaces the provincial component of the former Scientific Research and Experimental Development (SR&ED/RS&DE) Tax Credit, marking a structural shift in Québec’s approach. The federal SR&ED Tax Credit remains in place, creating a new two-tiered system: one federal, one provincial.
Who Is Eligible?
To qualify, a corporation must:
- Operate a business in Québec.
- Undertake R&D or pre-commercialization activities in Québec.
- Have such activities carried out on their behalf under contract in the province.
Importantly, the work must be done in Québec to qualify.
Eligible R&D Activities
Québec aligns its definition of R&D with the federal government, meaning the Canada Revenue Agency (CRA) will handle scientific reviews.
Eligible Pre-Commercialization Activities
Pre-commercialization efforts help bridge the gap between research and market readiness. Eligible activities must be tied to R&D work in Québec and may include:
- Tests, studies, or validations required for regulatory certifications.
- Product design: Improvements in form, function, materials, or aesthetics.
What Expenditures Qualify?
To claim the CRIC, expenditures must be:
- Incurred in Québec.
- Related to eligible R&D or pre-commercialization activities.
Qualified expenses include:
- Salaries or wages of employees involved in eligible work.
- 50% of payments to Québec-based subcontractors.
- 50% of payments to eligible public research centers, consortia, or university entities.
- Capital costs for acquiring property, excluding land, buildings, or usage rights.
How Much Can You Claim?
With the introduction of the 2025–2026 Québec budget, the structure of the R&D tax credit has undergone significant reform, including new rates, thresholds, and streamlined criteria for eligible expenses.
Under the CRIC, eligible corporations can claim a refundable tax credit at the following rates:
- 30% on up to $1 million of qualified expenditures (after subtracting the applicable exclusion threshold)
- 20% on the amount of qualified expenditures exceeding $1 million
This marks a key change from the previous regime, where the 30% rate applied to the first $3 million of eligible expenditures, and a lower 14% rate applied to amounts beyond that both of which were adjusted depending on the corporation’s taxable capital.
Need Help Navigating CRIC?
Contact us to ensure your business is well-positioned to take advantage of the CRIC and other Québec innovative incentives.
