The Government of Québec has launched a new tax credit for research and innovation – the CRIC program (Tax Credit for Research, Innovation and Commercialization). This CRIC program is intended to stimulate collaborative R‑D and the commercialization of innovations within Québec companies by granting them significant financial support. Concretely, the CRIC is a fully refundable innovation tax credit that can finance up to 30 % of a corporation’s first eligible R‑D expenses. Introduced in the Québec 2025‑2026 budget, it replaces and streamlines several former tax credits while enhancing fiscal support for innovation. The tone of the program is formal yet accessible: it targets the leaders of innovative businesses—SMEs as well as large corporations—who wish to understand and benefit from this financial aid for innovation.
In this blog post, we provide a technical, clear explanation of how the CRIC tax credit works: its terms, advantages, corporate eligibility criteria, eligible expenditures, the CRIC tax‑credit rate and its calculation, the steps for filing a CRIC claim, and the main tax implications to know. A concrete example using a fictitious company is also supplied to illustrate the calculation of the CRIC in practice. This comprehensive guide is optimized to give you all the essential information on Québec’s CRIC (Canada), the province’s new fiscal lever for innovation.
What Is the CRIC Program?
The Tax Credit for Research, Innovation and Commercialization (CRIC) is a new fiscal measure introduced by the Québec government in 2025 to support corporate innovation efforts. It is a refundable tax credit, meaning that even a company with no tax payable can receive the credit amount as a refund. The CRIC is the cornerstone of a new fiscal assistance regime aimed at simplifying and optimizing support for research and development (R‑D) in Québec.
This program was designed to replace a set of earlier, complex or under‑used fiscal measures. CRIC alone supersedes eight existing measures: it merges the four former R‑D tax credits, the industrial‑design credit, the tax credit for technological‑adaptation services, and the two tax holidays related to hiring foreign researchers or experts. By unifying these aids into a single innovation tax credit, the government greatly simplifies procedures for businesses. The CRIC thus offers a more efficient fiscal framework better suited to the real needs of innovative companies, with one single process to support both research and the steps leading to commercialization.
In short, the CRIC is a collaborative‑innovation and commercialization tax credit designed to encourage Québec companies to invest in innovative projects and collaborate with research partners. It can fund part of wages, equipment and services tied to R‑D and pre‑commercial activities (e.g., prototyping, testing or initial market launch). The result is fiscal support that can reach hundreds of thousands of dollars per company, fully refundable, reducing the financial risk of innovative projects.
Advantages of the CRIC Innovation Tax Credit
Advantage | Why It Matters |
|---|---|
Enhanced support on first investments | A 30 % rate applies to the first CA$1 million of eligible expenses above the base threshold, then 20 % beyond that. Unlike the old regime, this enhanced rate is offered to all companies regardless of size, strongly encouraging them to invest up to CA$1 M to capture the maximum rate—particularly beneficial for innovative SMEs. |
Broader scope of eligible activities | CRIC covers more than classical scientific research and experimental development: it includes pre‑commercialization tasks such as prototyping, feasibility tests, industrial design, packaging development, regulatory trials for certification, and market studies preparatory to launch. Companies therefore obtain a credit not only for inventing a technology but also for optimizing and bringing it to market. |
Incentive for collaboration and high‑skilled jobs | Fifty percent of an R‑D contract with a Québec‑based subcontractor (university, research center, consortium, or another company) is eligible, prompting firms to leverage external expertise while maintaining parity with in‑house work. High credit rates on R‑D wages foster creation and retention of highly qualified innovation jobs in Québec. |
Administrative simplification and predictability | By grouping eight programs into one, paperwork is drastically cut. One integrated form is filed with the provincial tax return. Being fully refundable improves cash‑flow even for unprofitable startups. The government has earmarked about CA$2.4 billion over five years—an extra CA$271 M compared with the former credits—signalling the program’s stability. |
In sum, CRIC offers more generous funding, a wider activity range, less red tape, and greater accessibility for all innovative businesses—a genuine growth lever to accelerate “made‑in‑Québec” innovations.
Eligible Businesses: Who Can Benefit?
To qualify for CRIC, a business must:
- Be a corporation operating in Québec. Only legal persons with an establishment in Québec conducting commercial activities may claim the credit. Individuals, trusts and certain public corporations are not eligible.
- Carry out R‑D or pre‑commercial work in Québec. Activities must either be performed directly in‑house or subcontracted locally. R‑D projects must meet Canada’s federal SR&ED definition; pre‑commercial work must flow directly from prior eligible R‑D done in Québec.
- Exceed the minimum exclusion threshold. A company must spend at least the greater of CA$50,000 or about CA$18,571 per full‑time R‑D employee (pro‑rated) each year before credit starts to accrue. This focuses aid on substantial innovation efforts.
Additional technical conditions apply (non‑arm’s‑length subcontractor rules, sharing of the CA$1 M enhanced‑rate ceiling among associated companies, offset of other government assistance, etc.). Essentially, any Québec corporation making significant investments in R‑D and innovation may likely claim CRIC.
Eligible Expenditures
CRIC recognizes a broad range of costs:
- R‑D wages of Québec employees directly involved in design, experiments, testing, etc.
- R‑D subcontracting costs in Québec: 50 % of a local subcontract or research contract amount.
- Capital‑equipment costs: new assets used exclusively in eligible activities for at least 730 consecutive days in Québec (lab equipment, prototype machinery, specialized software, IT hardware, etc.).
- Pre‑commercialization expenses fall into the above categories (wages, local contracts, equipment) for activities such as prototyping, pre‑production design, regulatory tests, industrial design, packaging, exploratory market studies, and so forth, provided they are directly linked to a Québec R‑D project.
Indirect costs (materials consumed, general overhead, travel) are not expressly eligible unless captured within salaries or contracts. All other government aid must be subtracted to avoid double funding.
Credit Rate and Calculation
- Determine the exclusion threshold (≥ CA$50,000 or staff‑based amount).
- Apply credit rates to eligible expenses above that threshold:
- 30 % on the first CA$1 million;
- 20 % on any amount beyond.
- Refundable nature: the credit first offsets Québec corporate tax; any excess is refunded. Credit is government assistance, so it generally reduces deductible expenses or is included as taxable income later—coordinate with federal SR&ED and other programs accordingly.
Formula
CRIC amount = 30 % × (eligible expenses between threshold and CA$1,000,000) + 20 % × (eligible expenses above CA$1,000,000)
Proper planning (e.g., concentrating expenses in one fiscal year to reach the CA$1 M band) maximizes benefit.
How to Obtain CRIC: Application Steps
- Plan and document projects early. Track hours, contracts, invoices, payments; draft technical reports.
- Calculate exclusion threshold and credit. Simulate internally, considering other subsidies and associated‑company sharing.
- File the CRIC form with your Québec corporate tax return for fiscal years beginning after 25 March 2025. Attach supporting documents (project descriptions, technical forms, expense statements, equipment proofs, etc.).
- Respond to any follow‑up from Revenu Québec. Keep records several years for potential audit.
Thorough documentation and timely filing make the process smoother; engaging an R‑D financing advisor or tax specialist can be worthwhile for first‑time applicants.
Tax Implications & Practical Tips
- Tax treatment: As refundable assistance, the credit generally reduces deductible expenses or is added to taxable income, preventing a double benefit—but the net gain is still substantial.
- Compliance: Ensure projects meet SR&ED‑type criteria (scientific/technological uncertainty, systematic investigation) and that pre‑commercial activities clearly stem from eligible R‑D. Exclude routine marketing or general admin costs.
- Optimization strategies:
- Cluster expenses to surpass the threshold and fully use the 30 % on CA$1 M.
- Leverage Québec research partners: external university tests at CA$100 K cost net CA$50 K for credit purposes.
- Time equipment purchases so assets are used exclusively in R‑D for two years to qualify.
- Interaction with other programs: CRIC complements the federal SR&ED credit (15‑35 %). Coordinate claims to avoid double counting; other provincial sectoral incentives may still apply, but many have been folded into CRIC.
Application Example: TechnoInnov Inc.
Item | Amount (CA$) | Eligible Portion |
|---|---|---|
R‑D salaries | 800,000 | 800,000 |
New lab equipment | 100,000 | 100,000 |
University contract | 200,000 | 100,000 (50 %) |
Total eligible | 1,000,000 |
- Exclusion threshold: CA$50,000
- Expenses above threshold: 1,000,000 – 50,000 = 950,000
- Credit at 30 % (all under CA$1 M band): 30 % × 950,000 = CA$285,000
If TechnoInnov has little or no Québec tax payable for 2026, Revenu Québec refunds nearly the full CA$285,000, substantially offsetting its CA$1 M innovation spend. Proper documentation (time sheets, university reports, equipment invoices, technical dossier) safeguards the claim.
Conclusion: CRIC—An Indispensable Fiscal Lever for Innovating in Québec
By consolidating and enriching previous measures, the CRIC provides Québec companies with a simple, generous framework to finance R‑D and commercialization projects:
- 30 % enhanced rate on first CA$1 M of eligible innovation spend, for all firms;
- eligibility extended to pre‑commercialization (industrial design, regulatory tests, packaging, etc.);
- inclusion of collaborations with universities and research centers;
- fully refundable credit, boosting cash‑flow even for startups.
To capture the full benefit, companies must prepare solid files, understand eligibility criteria, and integrate CRIC into their financing strategy. When used diligently, CRIC is a powerful catalyst—lowering net innovation costs and encouraging more Québec firms to pursue breakthrough technologies and market leadership, ultimately fostering economic prosperity for the province.
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