{"id":2184,"date":"2025-09-03T16:10:44","date_gmt":"2025-09-03T16:10:44","guid":{"rendered":"https:\/\/leyton.majjane.agency\/ca\/post\/cric-quebecs-new-tax-credit-replaces-sred-for-innovation\/"},"modified":"2025-09-03T16:10:44","modified_gmt":"2025-09-03T16:10:44","slug":"cric-quebecs-new-tax-credit-replaces-sred-for-innovation","status":"publish","type":"article","link":"https:\/\/leyton.com\/ca\/en\/insights\/articles\/cric-quebecs-new-tax-credit-replaces-sred-for-innovation\/","title":{"rendered":"CRIC : Quebec’s New Tax Credit Replaces SR&ED for Innovation"},"content":{"rendered":"

The introduction of the Research, Innovation, and Commercialization Tax Credit <\/a>(CRIC)<\/strong> marks a major shift in Quebec’s landscape of tax incentives for innovation. Quebec replaces several existing measures related to SR&ED<\/a><\/strong> for corporate tax years beginning after March 25, 2025. <\/p>\n

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.<\/p>\n

Here are the main changes the CRIC program<\/strong> brought compared to the former SR&ED tax credit<\/a> <\/strong>at the provincial level:<\/p>\n

Consolidation of existing measures<\/h2>\n

The CRIC <\/strong>consolidates several provincial tax credits related to SR&ED<\/strong>. This includes the SR&ED wage tax credit <\/strong>and the research contract tax credit<\/strong>. <\/p>\n

This simplification aims to make the program more consistent. It also makes the program easier for businesses to navigate.<\/p>\n

CRIC Eligibility: Expanded Activities from R&D to Pre-Commercialization<\/h2>\n

From R&D to pre-commercialization: This is one of the most significant changes. <\/p>\n

While the former SR&ED credit<\/strong> focused primarily on scientific research and experimental development activities, the CRIC <\/strong>now includes pre-commercialization activities<\/strong>.<\/p>\n

This means that expenses related to prototyping, feasibility testing, industrial design, and product improvement in the early stages of development are now eligible. <\/p>\n

The objective supports companies throughout the innovation process, from the initial idea to market launch.<\/p>\n

Inclusion of capital and subcontracting expenses<\/h2>\n

The CRIC <\/strong>takes into account capital expenses (new equipment used exclusively for eligible activities) and subcontracting contracts (R&D service providers, universities, CCTTs, research consortia).<\/p>\n

Quebec standardizes the percentage of eligible subcontracting expenses at 50%.<\/p>\n

Modification of rates and introduction of thresholds<\/h2>\n

The CRIC<\/strong> proposes refundable and non-refundable tax credit rates<\/strong>. With a bonus rate of 30% on the first million dollars of eligible expenses<\/strong> that exceed an exclusion threshold.<\/p>\n

For expenses over $1 million, a rate of 20% is applied<\/strong>. This threshold is the higher of $50,000 or an amount calculated based on the time spent by employees on eligible activities. <\/p>\n

The system calculates the latter by multiplying the full-time equivalent (FTE) time <\/strong>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.<\/p>\n

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<\/strong>. Future years may see this amount indexed upward.<\/p>\n

The system then compares this amount to the fixed threshold of $50,000<\/strong>, 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.<\/p>\n

Exclusion of certain activities and rule adjustments<\/h2>\n

Certain activities that were previously eligible may be excluded, such as maintenance or improvement work on existing systems.<\/p>\n

Specific rules also apply in the case of intercompany outsourcing, which may result in a reduction in the credit rate<\/strong> if more than 50% of revenue comes from related companies<\/strong>.<\/p>\n

<\/div>\n

Contact our experts more today to prepare your fiscal year and stay ahead of competition <\/p>\n

<\/div>\n
\n
Contact an expert<\/a><\/div>\n<\/div>\n
<\/div>\n

Sources<\/h3>\n