Business grants in Quebec
A Quebec business has access to federal, provincial and municipal assistance that stacks according to precise rules. Here is what exists, who it is for, and in what order to file.
- Federal and provincial programs
- How assistance stacks
- Filing order and deadlines
The programs
In Quebec, the main forms of business assistance are SR&ED, a federal tax credit of 35% refundable for a Canadian-controlled private corporation and 15% non-refundable for others, to which the provincial credit adds 30% on the first $1 million of eligible expenditures and 20% beyond; the ESSOR program from Investissement Québec for investment projects; NRC IRAP for technological innovation; and CanExport for developing foreign markets. These forms of assistance stack, but assistance received reduces the base of the others.
- 01
Tax credits
SR&ED is the broadest lever: it covers work that resolves a technological uncertainty, not only laboratory research. Sector credits such as the CDAE and the CTMM are added to it.
- 02
Direct grants
ESSOR, NRC IRAP and CanExport fund an identified project against a budget and a schedule. Unlike tax credits, they must be applied for before the expense is incurred.
- 03
Filing order
A grant received is deducted from the base of a tax credit. Filing in the wrong order costs part of the total, and no agency will point it out.
Find out which programs target your project
Describe your project in twenty minutes. We will tell you which programs are within reach, what amounts are realistic, and which deadlines to meet.
Frequently asked questions
A grant is applied for before the expense is incurred and funds a specific project, at an agency’s discretion. A tax credit is claimed afterwards, in the income tax return, for expenditures already made that meet a legal definition. A credit is not discretionary: if the criteria are met, it is owed.
Federally, 35% of eligible expenditures, refundable, for a Canadian-controlled private corporation; 15% non-refundable for a public or other corporation. In Quebec, the provincial credit is 30% on the first $1 million of eligible expenditures and 20% beyond. The provincial credit is deducted from the federal base, and both credits are taxable the following year.
Yes, for refundable credits. A Canadian-controlled private corporation receives the enhanced federal portion and the provincial credit in cash, even with no tax payable. The opposite is true of the 15% federal base rate, which is not refundable: it is only useful against tax owing.
For SR&ED: salaries of staff assigned to the work, the retained portion of subcontracting, and materials consumed. The proxy method adds an overhead replacement amount equal to 55% of direct salaries, which avoids allocating rent and electricity line by line. Direct grants each have their own list.
Yes, and within the same engagement when several programs target the same project. That is the most common situation, and the one where filing order changes the total received.