What the CRIC Can Fund: Eligible Expenses, Rates, and Rules in Quebec
The Research, Innovation and Commercialization Tax Credit (CRIC) is Quebec’s refundable corporate tax credit for eligible research and development (R&D) and pre‑commercialization activities. It applies to taxation years beginning after March 25, 2025 and is claimed through the prescribed form filed with your provincial corporate tax return. This guide details what CRIC can fund, the eligible expenses and rates, exclusions, documentation, and practical budgeting tips so organizations can plan projects and claims with confidence.
CRIC provides a 30% refundable credit on the first $1,000,000 of eligible expenditures above an exclusion threshold, and 20% thereafter. Eligible costs include salaries, a portion of subcontracting and public research payments, and certain equipment acquisitions (real estate is excluded). Stacking rules require that other assistance be deducted and prohibit double‑claiming the same expense under another Quebec credit.
Program Funding Overview
CRIC is a provincial, refundable tax credit designed to support:
Scientific research and experimental development (R&D) performed in Quebec, or performed on behalf of a corporation in Quebec under contract.
Pre‑commercialization activities that are continuous with R&D previously carried out in Quebec by the corporation or on its behalf.
Key points:
Funding model: Refundable Quebec corporate tax credit (not a grant or loan).
Claim timing: Filed with the corporate income tax return for taxation years beginning after March 25, 2025, using the prescribed form RD‑1029.8.CR.
Scope: Covers specific cost categories tied to eligible R&D and pre‑commercialization work carried out in Quebec.
Administration: Quebec’s regime is harmonized with the federal definition of R&D; the Canada Revenue Agency performs the scientific review of R&D activities, which sets evidentiary expectations.
Funding Amounts & Rates
CRIC funding is calculated as a percentage of eligible expenditures incurred for qualifying activities in Quebec.
30% rate: Applied to the first $1,000,000 of eligible expenditures that exceed the exclusion threshold.
20% rate: Applied to the remaining eligible expenditures above the first $1,000,000 (if applicable).
Exclusion threshold:
You must exceed an exclusion threshold in the taxation year to access CRIC.
The threshold is the greater of:
$50,000, or
The sum of the personal base amount of the personal income tax system applicable for each employee, adjusted in proportion to each employee’s time dedicated to eligible R&D or pre‑commercialization activities.
Practically, this means smaller teams may face a $50,000 floor, while larger teams’ thresholds rise with the number of employees and their time allocations on eligible work.
How to think about the two‑tier rate:
Plan that only the portion of eligible expenditures above the exclusion threshold qualifies.
The first $1,000,000 of that qualifying portion earns 30%; any additional qualifying amount earns 20%.
CRIC Eligible Expenses
CRIC recognizes four main categories of eligible costs, all of which must be incurred in Quebec by the corporation or on its behalf under contract, and tied directly to eligible R&D or pre‑commercialization activities.
1) Salaries and wages
Salaries and wages paid to employees for time spent on eligible R&D or pre‑commercialization activities performed in Quebec.
Time must be attributable to specific scientific, technological, engineering, testing, or product design tasks.
Use time allocations (e.g., timesheets) to apportion staff costs between eligible and non‑eligible work.
2) Subcontracting (50% of amounts)
50% of the amount paid to subcontractors under contracts carried out in Quebec for eligible R&D or pre‑commercialization work.
Ensure the subcontract agreement specifies the eligible scope, location in Quebec, deliverables, and timing.
3) Public research organizations, research consortia, or universities (50% of payments)
50% of payments made to an eligible public research centre, an eligible research consortium, or an eligible university entity to perform qualifying activities in Quebec.
Maintain agreements and reports that link the work to R&D or pre‑commercialization objectives.
4) Equipment acquisitions (capital expenditures)
Costs to acquire eligible equipment used for the execution of qualifying activities in Quebec.
Explicit exclusions: the acquisition of a building, land, or a right of use in respect of a building or land is not eligible.
Keep evidence of the equipment’s function and its role in eligible R&D or pre‑commercialization tasks.
Eligible activity alignment
R&D activities are defined in harmony with the federal regime and may include basic research, applied research, and experimental development aimed at creating new or improved materials, products, devices, or processes.
Pre‑commercialization activities must be continuous with prior R&D performed in Quebec and may include:
Testing, technological validations, and studies carried out to meet regulatory requirements to obtain pre‑market approvals or certifications for an innovation.
Product design focused on form, aesthetics, functional improvements, and materials selection.
Ineligible Expenses
CRIC does not fund all project or business costs. Key exclusions include:
Real estate and related rights:
Acquisition costs for a building, land, or a right of use of a building or land.
Double‑claiming under Quebec credits:
You cannot claim CRIC and another Quebec credit for the same expenditure.
Example: If a property acquisition is claimed under the investment and innovation tax credit (C3i), it cannot be claimed under CRIC, and vice versa.
Large investment project tax holiday interactions:
If you hold an initial certificate for the tax holiday for large investment projects, you cannot claim CRIC for an expenditure related to property used or acquired for that project.
Activities or expenditures outside Quebec:
Work not carried out in Quebec, or not performed on your behalf in Quebec under contract, is not eligible.
Activities not aligned with CRIC’s definitions:
Pre‑commercialization that is not in continuity with R&D undertaken in Quebec by or for the corporation.
General business costs without a direct link to eligible activities.
Note: Other government or non‑government assistance must be netted against expenditures per usual rules, which reduces the base for CRIC calculation.
Expense Documentation Requirements
Strong documentation is essential to support a CRIC claim and to align with the harmonized R&D definition and review expectations.
For salaries and wages:
Detailed timesheets showing hours on eligible tasks, by employee and by project.
Job descriptions linking roles to R&D or pre‑commercialization responsibilities.
Payroll records and reconciliations that match time allocations.
For subcontracting (50% eligible):
Signed contracts describing eligible scope, Quebec execution, timelines, and deliverables.
Invoices referencing the eligible work and period.
Evidence the subcontracted work was performed in Quebec (e.g., location statements, site logs).
For public research entities (50% eligible):
Collaboration agreements with the eligible public research centre, research consortium, or university entity.
Technical reports, test plans, data packages, and final deliverables.
Proof of payment with clear references to the eligible activities.
For equipment acquisitions:
Purchase invoices, asset records, and commissioning documentation.
Evidence of use in eligible activities (e.g., lab logs, test records, utilization notes).
Documentation confirming the asset is not a building, land, or a right of use for real estate.
For pre‑commercialization:
Regulatory testing plans, protocols, and results tied to specific approval or certification pathways.
Certification correspondence, applications, or preliminary filings.
Product design files, drawings, prototypes, and change logs demonstrating functional improvements or material choices.
Retention and readiness:
Maintain a complete audit trail for each cost.
Ensure records map cleanly from project plan to eligible activity, to cost entry, to proof of work done in Quebec.
Examples of Funded Projects
Software and AI companies:
Eligible R&D: Experimental development to create new algorithms or system architectures, performance testing to overcome technical uncertainties.
Eligible pre‑commercialization: Security or privacy validations required for certification; product design for UI/UX form and functional improvements.
Example costs: Developer salaries tied to experimental tasks; 50% of Quebec subcontracted penetration testing; design iterations for product usability; equipment such as testing servers (not real estate).
Advanced manufacturing:
Eligible R&D: Prototyping and experimental trials to create a new composite component or to improve an existing process.
Eligible pre‑commercialization: Mechanical testing and standards compliance validations to obtain required certifications.
Example costs: Engineer and technician salaries; 50% of Quebec machining subcontractors; payments to an eligible public research lab for specialized testing; acquisition of test rigs used in eligible trials.
Life sciences and medical devices:
Eligible R&D: Experimental development of a device or formulation to achieve novel performance.
Eligible pre‑commercialization: Bench tests and validation studies required for pre‑market approvals; design for manufacturability and functional enhancements.
Example costs: Scientists’ salaries; 50% of Quebec clinical simulation services; payments to an eligible university lab; specialized equipment used for validation.
Cleantech and energy:
Eligible R&D: New control systems or materials to improve efficiency or durability.
Eligible pre‑commercialization: Safety and interoperability testing to satisfy regulatory frameworks; product design to optimize materials and form factor.
Example costs: R&D staff time; 50% of Quebec field‑testing subcontractors; public research collaborations; metrology and testing equipment.
Funding Disbursement & Claiming Process
Funding mechanism: Refundable corporate tax credit applied on your Quebec corporate tax return.
Claim form: RD‑1029.8.CR, the prescribed CRIC form, must be completed and filed with your return for taxation years beginning after March 25, 2025.
Timing: Refunds are issued following assessment by Revenu Québec; processing timelines can vary based on completeness and review needs.
Scientific review: R&D definitions are harmonized with the federal regime; scientific review standards align with the Canada Revenue Agency’s approach to R&D assessment.
Record‑keeping: Maintain robust documentation to support both financial and technical components of your claim.
Stacking Rules
CRIC has clear interaction rules with other assistance:
Assistance deduction:
Any government or non‑government assistance attributable to the same expenditures must be deducted from eligible expenditures per the usual rules, lowering the CRIC base.
No double‑claiming under Quebec credits:
You cannot claim CRIC and another Quebec tax credit on the same expenditure (e.g., C3i vs CRIC for the same property acquisition).
Tax holiday for large investment projects:
If an initial certificate is held, CRIC cannot be claimed for expenditures related to property used or acquired for that large investment project.
Federal SR&ED:
CRIC is provincial and may generally be combined with the federal SR&ED program, subject to assistance deductions and without double‑counting the same costs for two Quebec credits. Align documentation to meet both regimes.
Real‑World Budgeting Tips
Map eligible work to Quebec:
Ensure qualifying tasks are performed in Quebec or on your behalf in Quebec via written contracts that specify the location and scope.
Plan for the exclusion threshold:
Estimate the greater of $50,000 or the employee‑based adjusted amount and model your claimable base accordingly.
Optimize labour tracking:
Implement detailed timesheets and project codes so salaries are cleanly attributable to eligible R&D and pre‑commercialization.
Structure subcontracting:
Use Quebec subcontractors for eligible work; include statements of location, deliverables, and timelines in contracts to substantiate the 50% eligibility.
Leverage public research partners:
Consider collaborations with eligible public research centres, consortia, or universities for specialized validations; budget for the 50% eligible portion.
Align equipment timing:
Schedule eligible equipment purchases when they can be used promptly in qualifying activities; exclude real estate from CRIC planning.
Respect stacking limits:
Decide upfront whether CRIC or another Quebec credit (e.g., C3i) delivers more value for a given expense; do not plan to claim both.
Fiscal year planning:
Confirm that your taxation year begins after March 25, 2025 to be in scope; model expenditures by fiscal period to maximize the 30% first‑tier benefit.
Conclusion
CRIC is a targeted, refundable Quebec tax credit that funds core inputs to innovation: salaries for eligible work, 50% of subcontracted and public research activities performed in Quebec, and certain equipment acquisitions, with real estate expressly excluded. The credit applies at 30% on the first $1,000,000 of eligible expenditures above the exclusion threshold and 20% thereafter, with strict stacking rules and documentation standards. By mapping activities to Quebec, tracking labour precisely, structuring contracts, and planning around the threshold and interaction with other credits, organizations can use CRIC to advance R&D and navigate pre‑commercialization steps toward certification and market entry.
