Quebec CRIC: Claim refundable tax credits for R&D and pre-commercialization

What the CRIC is: two streams and new tax architecture

The Research, Innovation, and Commercialization tax credit, known officially as the Crédit d’impôt pour la recherche, l’innovation et la commercialisation (CRIC), is the central fiscal framework among Quebec business grants and tax incentives for corporate technological innovation. Governed by articles 1029.8.21.16.1 to 1029.8.21.16.31 of the Quebec Taxation Act, the CRIC replaces several credits, including the former Quebec R&D wage credit (form RD-1029.7) for all taxation years beginning after March 25, 2025.

The program operates through two distinct streams, both claimed using prescribed form RD-1029.8.CR attached to the corporate income tax return (CO-17):

1. The Research and Development (R&D) stream, reported on line 440 under code 112, supporting scientific research and experimental development activities eligible for the federal SR&ED program.
2. The Pre-commercialization stream, reported on line 440 under code 113, supporting product certification, homologation, and industrial design required prior to initial commercial market launch.

Unlike the former regime, which restricted eligibility to current payroll and subcontracts, the CRIC expands the tax base to include specialized capital equipment and formal regulatory approval expenditures.

Eligible expenditures: wages, subcontracts, and capital equipment

The CRIC broadens eligible cost categories recognized by Revenu Québec compared to the previous wage credit. Qualified expenditures include:

A critical update concerns capital property. Under the former wage credit, capital assets were excluded. Under Part 5.3 of form RD-1029.8.CR, capital expenditures incurred to acquire new depreciable property used directly in Quebec for R&D or pre-commercialization activities are eligible. This includes dedicated test benches, pilot plant equipment, and specialized research servers.

Pre-commercialization stream: qualifying activities and strict exclusions

The pre-commercialization component represents the major legislative expansion within the CRIC. To qualify, activities must represent a direct continuation of eligible R&D work carried out in Quebec by or on behalf of the corporation. Qualifying activities fall into two main categories:

• Regulatory homologation and certification: testing, technical validation studies, and clinical trials required to obtain mandatory regulatory approvals prior to initial market entry, including submissions to Health Canada, the US FDA, European CE marking, and CSA standards.
• Industrial product design: a systematic, documented design process establishing the functional, formal, and ergonomic specifications of industrially manufactured goods resulting from Quebec R&D.

To protect claims during Revenu Québec tax audits, corporations must separate recognized activities from statutory exclusions. Software firms developing business applications or web platforms without technological uncertainty qualify instead under the E-Business Development Tax Credit (CDAE):

Rate structure and expenditure caps: correcting industry misconceptions

The CRIC introduces a restructured rate and ceiling model. The statutory rates apply as follows:

• Enhanced 30% rate: applies to the first $1,000,000 of eligible expenditures above the exclusion threshold.
• Base 20% rate: applies to eligible expenditures above that $1,000,000.

Several consulting websites and online aggregators continue to state that Quebec’s enhanced 30% credit applies up to $3,000,000 in spending. That figure reflects the repealed rules of form RD-1029.7. Under the CRIC (form RD-1029.8.CR, line 160), the enhanced ceiling is strictly $1,000,000. In exchange, the base rate applicable to spending above the cap rises from 14% to 20%, benefiting firms with larger research budgets.

The $1,000,000 enhanced expenditure limit must be allocated among all associated corporations using prescribed agreement form RD-1029.8.EN.

The same expense cannot earn both the CRIC and another Quebec tax credit, such as the C3i: the company must choose. Aid received on the same expenses, government or not, is deducted from eligible expenses. Property used or acquired for a project under the large investment project tax holiday is excluded.

The exclusion threshold: applying the higher-of formula

The CRIC enforces an exclusion threshold that acts as a deductible, reducing gross eligible expenditures before the 30% or 20% rates are applied. The threshold for the taxation year equals the greater of two calculations:

1. A base exclusion floor of $50,000, prorated for short taxation years based on the ratio of fiscal days to 365.
2. The sum of determined amounts for each eligible employee, calculated by multiplying the employee’s Quebec basic personal amount ($18,952 in 2026) by their qualifying days divided by 365.

This hybrid formula scales the deductible according to the size of the technical workforce deployed on qualifying projects.

For example, an employer deploying four full-time research engineers across the entire year generates an employee threshold of $75,808 (4 multiplied by $18,952). Because $75,808 exceeds the $50,000 base floor, $75,808 is deducted from gross eligible expenditures.

The Quebec budget plan and quebec.ca present no adjustment of this threshold for assets. Have your situation confirmed with Revenu Québec.

Side-by-side comparison: former R&D credit versus the CRIC

The shift to the CRIC reshapes tax planning for innovative Quebec businesses. The following table contrasts the key parameters:

A company incurring $800,000 in research salaries and $200,000 in regulatory homologation costs now secures comprehensive tax support across its full development cycle, whereas certification costs were previously borne entirely without provincial tax relief.

Worked financial example: calculating a complete CRIC claim

Consider a Quebec environmental technology company developing a proprietary industrial water purification system. Its fiscal year starts after March 25, 2025.

Expenditures incurred during the fiscal year:

• Quebec R&D engineering salaries: $800,000 (five full-time technical employees).
• Arm’s-length engineering subcontract: $100,000 (eligible at 50%, or $50,000).
• Capital testing reactor equipment: $80,000 (eligible at 100%).
• Pre-commercialization compliance and safety certifications: $120,000 (eligible at 100%).
• Total gross eligible expenditures: $1,050,000.

Exclusion threshold calculation: The base floor is $50,000. The sum of determined amounts for the five employees (5 multiplied by $18,952) totals $94,760. The higher figure of $94,760 applies as the deductible. Net eligible expenditures: $1,050,000 minus $94,760 equals $955,240.

Tax credit calculation: Because net eligible expenditures ($955,240) remain within the $1,000,000 enhanced limit, the entire amount qualifies for the 30% enhanced rate: CRIC refundable tax credit: $955,240 multiplied by 30% equals $286,572.

Revenu Québec issues this $286,572 refund as a direct payment or direct deposit, regardless of whether the corporation owes any corporate income tax.

Federal SR&ED interaction: the government assistance grind

Combining Quebec and federal tax incentives does not yield a simple addition of rates. Taxpayers often assume that combining Quebec’s 30% rate and the federal 35% investment tax credit (ITC) delivers a 65% net return.

In practice: provincial credits are government assistance. The Quebec credit earned for a year reduces the federal pool of deductible expenditures and the qualified SR&ED expenditures of that same year, unless it is renounced by the filing-due date. The federal credit falls by 35% or 15% of the Quebec credit. These rules come from subsections 127(9) and 127(18) of the federal Income Tax Act. The CRA policy does not yet name the CRIC, so have this treatment confirmed for your file.

For pre-commercialization costs (code 113) or capital equipment not claimed on federal form T661, no federal grind occurs if the expense was excluded from the federal SR&ED pool.

Claim process, required tax schedules, and compliance timelines

Claiming the CRIC is managed directly through Revenu Québec upon filing your annual corporate income tax return. No pre-approval or certification from Investissement Québec is required. The filing follows six structured steps:

1. Maintain contemporaneous technical records: log hours by task, record experimental hypotheses, and document testing failures and technical milestones in real time.
2. Isolate pre-commercialization activities: verify direct continuity with Quebec R&D, archive regulatory submissions to Health Canada or the FDA, and maintain engineering design documentation.
3. Complete prescribed form RD-222: detail technological uncertainties, scientific methodologies, and technological advances for the R&D stream.
4. Complete prescribed form RD-1029.8.PR: identify pre-commercialization projects and itemize homologation and design costs.
5. Calculate credit amounts on form RD-1029.8.CR: aggregate expenditures, compute the exclusion threshold, and allocate amounts across the 30% and 20% tiers.
6. Report on corporate return CO-17: enter code 112 for R&D and code 113 for pre-commercialization on line 440 of the CO-17 return.

The statutory filing deadline is 12 months after the corporate income tax return due date. If an audit later disallows claimed amounts, Revenu Québec recovers funds through a special tax reported under code 103 on form CO-17 (articles 1129.0.10.11 to 1129.0.10.17 of the Taxation Act).

For how the CRIC fits into the wider provincial reforms, see our Quebec budget summary for businesses.

What Canadian Funding Partners does

Canadian Funding Partners coordinates CRIC claims with specialist partner firms. Where a file requires accounting or engineering expertise, the work is handled by qualified professionals at those firms, including eligible project review, required tax schedules (RD-1029.8.CR, RD-222, RD-1029.8.PR, and RD-1029.8.EN), eligible capital equipment and multi-year federal modelling. We are an independent advisory firm: we do not administer any public program, and funding decisions rest with the authorities.