Discover Tax Credits for Small Businesses in Quebec for 2025

In addition to tax credits, a Québec small-business deduction applies to the corporate tax rate of eligible SMEs, significantly reducing corporate income tax on the first income bracket—for instance, the provincial rate falls from roughly 11.5 % to as little as 3.2 % for SMEs that fully qualify for the deduction. Taken together, these measures form part of the government programs supporting SMEs in Québec and are intended to stimulate the economy by lightening the tax burden of start-ups or expanding businesses.

In this article we formally and thoroughly present the main tax credits available to small businesses in Québec, emphasizing their scope, financial advantages and relevance by sector. We successively address credits that foster investment and innovation (such as the Investment and Innovation Tax Credit, or C3i), credits tied to technological research and development, measures encouraging workforce training and hiring, and credits aimed at strategic sectors (manufacturing, technology, agriculture, culture) and regions of Québec. This overview gives entrepreneurs a clearer understanding of these often refundable fiscal tools and shows how to integrate them into the financial planning of their companies. In short, it is a genuine guide to Québec SME tax credits, ensuring no available fiscal assistance is overlooked.

Investment, Innovation and Digital Transformation: the C3i Tax Credit

To prompt SMEs to modernize their facilities and embark on their digital shift, the Québec government created the Investment and Innovation Tax Credit (Crédit d’impôt pour investissement et innovation, C3i). Sometimes called the Québec investment and innovation tax credit, this program offers significant financial support for acquiring assets that improve SME productivity or digital transformation. It is a refundable tax credit that typically ranges from 10 % to 40 % of the purchase cost of eligible equipment, depending on when the asset is acquired and the region where it will be used. After a temporary enhancement in 2021-2023, the rates in effect since 2024 are 15 %, 20 % or 25 %—the maximum applies to investments in territories with low economic vitality (remote regions).

The C3i covers specific categories of assets, including industrial manufacturing and processing machinery, electronic and computer equipment, and eligible management software packages (ERP systems). Thus, a manufacturing SME buying a new machine tool or a service business acquiring ERP software for its digital transition can both claim the credit. Purchases of computer equipment (Class 50) or eligible management software (Class 12) also qualify thanks to the credit for management software and IT equipment embedded in C3i. A deductible—$5,000 for software and IT hardware and $12,500 for other equipment—is subtracted before applying the credit rate.

Because the credit is refundable, even a start-up SME with little tax payable or with losses can receive a cheque for the credit amount, injecting cash directly into the business. C3i replaces and improves on earlier investment programs, widening support to digital-transformation assets. Enhanced rates (up to 40 %) from 2021-2023 advanced many automation and technology projects; from 2024 the permanent 15-25 % rates apply, and the program runs until 2029, giving firms multi-year certainty. In sum, C3i is a powerful modernization tax credit that favors both machinery purchases and digital management tools—especially attractive for manufacturing and innovation-focused SMEs in Québec.

Research and Development: SR&ED and Technological Innovation Tax Credits

Technological innovation and research & development (R&D) receive major fiscal incentives in Québec. Chief among them is the Scientific Research and Experimental Development (SR&ED) tax credit, which complements the federal program. For Canadian-controlled private corporations, the Québec credit can reach 30 % on the first C$3 million of eligible annual R&D expenses, then 14 % on the excess. Largely refundable, it lets technology SMEs recover substantial sums even when they have no taxable profit. Combined with the federal SR&ED credit (up to 35 %) total support can cover up to 64 % of eligible R&D salaries in Québec, with government absorbing over half the innovation risk.

Additional components target partnership research with universities or public labs, pre-competitive collaborative research, and contributions to recognized research consortia—driving synergy among SMEs and institutions. An SME subcontracting university research or joining an industry consortium can secure a refundable credit on part of those costs, broadening innovation beyond in-house R&D.

The Tax Credit for the Development of E-Business (Crédit d’impôt pour le développement des affaires électroniques, CDAE) specifically benefits information-technology firms, rebating up to 30 % of eligible salaries (capped at C$25,000 per employee per year). Modernized in 2025 to widen access, the CDAE lowers hiring costs for programmers, analysts and other IT specialists. Alongside CDAE, a broader technological-innovation credit supports adopting or creating innovative tech in Québec—from new apps and AI platforms to novel products in manufacturing. Taken together, SR&ED, CDAE, and related programs give innovative SMEs substantial financial backing to turn ideas into commercial reality.

Workforce Training and Hiring: Fiscal Support for Employment

Skill development and quality job creation are likewise encouraged through targeted credits.

• Training Credit (2018-2022). The Tax Credit for Training a Worker Employed by an SME reimbursed 30 % of eligible training costs, up to C$5,460 per employee yearly, covering wages paid during up to 520 training hours. It phased out for payrolls above C$5-7 million and applied only to expenses incurred before 1 January 2023, but it modernized the skills of thousands of workers.

• Experienced Workers Credit (abolished 2024). The Tax Credit Promoting Retention of Experienced Workers helped employers recover part of payroll contributions for employees aged 60 +. It applies only to wages paid before 13 March 2024.

• On-the-Job Training Internship Credit (current). The Tax Credit for Work-Placement Internships reimburses up to C$24,000 per eligible intern in technical or scientific fields. It often stacks with federal subsidies, easing entry-level hiring for SMEs.

• New Financial Services Corporation Hiring Credit. A niche incentive offering credits based on jobs created by new financial-services firms setting up in Québec, illustrating lawmakers’ creative use of targeted tax credits.

Together, broad and sector-specific programs help Québec tackle labour shortages, boost ongoing training and raise workforce skills.

Sector-Specific Tax Credits: Manufacturing, Technology, Agriculture and Culture

Manufacturing. Beyond C3i, the Tax Credit for Innovative Manufacturing Companies refunds up to 20 % of new advanced-equipment costs. A Tax Credit for Industrial Design covers 15 % of an industrial designer’s salary (up to C$40,000 a year) to spur product-level innovation.

Technology (IT). In addition to CDAE and SR&ED, the Tax Credit for the Production of Multimedia Titles refunds up to 37.5 % of eligible production expenses for video-game, interactive-software or VR projects—often paid in advance-installments to smooth studio cash flow.

Agriculture. The Tax Credit for Interest on Agricultural Loans refunds up to 40 % of interest on supplier loans guaranteed by La Financière agricole du Québec, easing land, equipment and facility financing. The Farm Property Tax Credit also reduces municipal tax burdens, and qualifying agri-innovations can claim SR&ED.

Culture and Creative Industries. A suite of credits supports:

• Québec film & TV production

• Film-production services for foreign shoots

• Book publishing

• Sound-recording production

• Multimedia titles (video games)

Rates generally run 25–40 % of eligible costs—usually refundable—helping cultural SMEs secure financing and compete internationally.

Regional Tax Credits: Boosting Gaspésie and Remote Regions

Balanced development leads Québec to offer regional credits, notably the Tax Credit for Gaspésie and Certain Maritime Regions of Québec (a.k.a. the Gaspésie Employment Credit). Since 2000 it refunds 15 % of eligible wages (30 % for priority activities such as marine biotechnology, mariculture or tourism in the Îles-de-la-Madeleine), on salaries up to about C$83,333. Authorized through 31 December 2025, it targets manufacturing, marine resources, wind energy, peat, biotechnology, mariculture and recreational tourism.

Past programs like the Tax Credit for Job Creation in Designated Regions (Bas-Saint-Laurent, Saguenay-Lac-Saint-Jean, Abitibi-Témiscamingue, Côte-Nord) offered up to 40 % on regional payroll growth. Though some have ended or merged, Québec still differentiates aid where needs are greatest, giving remote SMEs a comparative advantage and encouraging investment outside large urban centers.

Conclusion

Québec’s SME tax credits form a coherent set of fiscal levers that drive growth, innovation and regional vitality. Whether through a refundable credit for cutting-edge equipment, incentives for R&D, support for employee training, or targeted hiring measures, each program meets specific entrepreneurial needs. Properly integrated, these credits lower the net cost of investment and expansion projects, raise profitability and competitiveness, and bolster business sustainability.

Effective use requires up-to-date knowledge of eligibility rules, as rates, conditions and deadlines shift with each budget. Recent expiries (training credit, experienced-workers credit) contrast with other extensions or enhancements. SME leaders should therefore consult a tax specialist or Revenu Québec’s official resources to capture every applicable program.

Ultimately, Québec offers some of the most generous small-business fiscal assistance in North America. Whether your company is manufacturing, technological, agricultural, cultural or service-oriented—based in Montréal or a remote region—there is likely one or more tax credits tailored to you. By optimizing them, you can cut taxes or receive welcome refunds and reinvest in what counts: innovation, job creation and long-term prosperity for your business and community. Québec SME tax credits are thus more than mere tax savings—they are strategic tools for growth and innovation, in partnership with the Québec government.