The introduction of the Research, Innovation, and Commercialization Tax Credit (CRIC) marks a major shift in Quebec’s landscape of tax incentives for innovation. Quebec replaces several existing measures related to SR&ED for corporate tax years beginning after March 25, 2025.
This reform aims to boost innovation and strengthen the competitiveness of Quebec businesses. It also broadens the scope of eligible activities and simplifies the process.
Here are the main changes the CRIC program brought compared to the former SR&ED tax credit at the provincial level:
Consolidation of existing measures
The CRIC consolidates several provincial tax credits related to SR&ED. This includes the SR&ED wage tax credit and the research contract tax credit.
This simplification aims to make the program more consistent. It also makes the program easier for businesses to navigate.
CRIC Eligibility: Expanded Activities from R&D to Pre-Commercialization
From R&D to pre-commercialization: This is one of the most significant changes.
While the former SR&ED credit focused primarily on scientific research and experimental development activities, the CRIC now includes pre-commercialization activities.
This means that expenses related to prototyping, feasibility testing, industrial design, and product improvement in the early stages of development are now eligible.
The objective supports companies throughout the innovation process, from the initial idea to market launch.
Inclusion of capital and subcontracting expenses
The CRIC takes into account capital expenses (new equipment used exclusively for eligible activities) and subcontracting contracts (R&D service providers, universities, CCTTs, research consortia).
Quebec standardizes the percentage of eligible subcontracting expenses at 50%.
Modification of rates and introduction of thresholds
The CRIC proposes refundable and non-refundable tax credit rates. With a bonus rate of 30% on the first million dollars of eligible expenses that exceed an exclusion threshold.
For expenses over $1 million, a rate of 20% is applied. This threshold is the higher of $50,000 or an amount calculated based on the time spent by employees on eligible activities.
The system calculates the latter by multiplying the full-time equivalent (FTE) time your employees devote to eligible innovation activities by the basic personal tax credit amount ($18,571 in 2025). FTE represents the proportion of an employee’s total working time devoted to these activities.
If your employees work the equivalent of one full-time person (1 FTE) on innovation projects, this threshold will therefore be $18,571 in 2025. Future years may see this amount indexed upward.
The system then compares this amount to the fixed threshold of $50,000, and the higher of the two will be the actual threshold. The system deducts this threshold from your eligible expenses before calculating your tax credit.
Exclusion of certain activities and rule adjustments
Certain activities that were previously eligible may be excluded, such as maintenance or improvement work on existing systems.
Specific rules also apply in the case of intercompany outsourcing, which may result in a reduction in the credit rate if more than 50% of revenue comes from related companies.
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