Quebec’s CRIC Revolution: How the Province Just Transformed R&D Funding for 2025 and Beyond

Breaking: Quebec has fundamentally reimagined how it supports innovation. Starting March 25, 2025, the province's complex web of eight separate R&D tax credits has been swept away and replaced with a single, supercharged program that rivals (and in many ways surpasses) the federal SR&ED program. 

For innovative businesses based in Quebec, this isn't just another policy update: It's a game-changing opportunity to dramatically increase non-dilutive capital access while streamlining the entire funding process. The new Tax Credit for Research, Innovation and Commercialization (CRIC) effectively creates Quebec's own version of SR&ED that's more generous, more accessible, and specifically designed for the modern innovation economy. 

If you're looking to stretch your R&D funding further in 2025, Quebec just became the most attractive jurisdiction in North America for innovation funding. 

The Great Quebec R&D Transformation: From Fragmentation to Power 

The Old Reality: A Bureaucratic Maze 

For years, Quebec businesses navigated a confusing landscape of separate provincial R&D programs. The province's SR&ED program was of a patchwork of credits that were effective but clunky, with different rates, different eligibility criteria, and different application processes. Companies often left money on the table simply because they couldn't navigate the complexity. 

The New Reality: Quebec's Provincial SR&ED on Steroids 

CRIC changes everything. Quebec will consolidate various previously existing R&D tax credits and eliminate those deemed less productive and administratively burdensome, creating a new Research, Innovation and Commercialization Tax Credit (CRIC) that effectively serves as the province's answer to the federal SR&ED program, but with significant improvements. 

Think of it this way: If federal SR&ED is the foundation of Canada's innovation funding, CRIC is now Quebec's provincial powerhouse that companies can stack on top for unprecedented support levels. 

Eight Programs Become One Juggernaut 

CRIC consolidates and replaces these former Quebec programs: 

• Tax credit for salaries and wages (R&D) 
• Tax credit for university research or research carried out by public research centres 
• Tax credit for private partnership pre-competitive research 
• Tax credit for fees and dues paid to research consortiums 
• Tax credit for technological adaptation services 
• Tax credit for industrial design 
• Tax holiday for foreign researchers 
• Tax holiday for foreign experts 

The result? A single program that's easier to access and significantly more generous than the sum of its parts. 

CRIC vs. Federal SR&ED: Quebec's Provincial Program Pulls Ahead 

Understanding how CRIC compares to federal SR&ED reveals why Quebec businesses now have a significant advantage: 

Federal SR&ED: The National Baseline 

• Rates: 35% (CCPCs, first $4.5M), 15% (others) 
• Focus: Experimental development and technological uncertainty resolution 
• Coverage: Traditional R&D activities, recently restored capital expenditures 
• Administration: Canada Revenue Agency (CRA) 

CRIC: Quebec's Enhanced Provincial Response 

• Rates: 30% refundable tax credit on the first $1 million of eligible expenses exceeding the exclusion threshold and then a 20% refundable tax credit on eligible expenses over $1 million 
• Focus: R&D plus pre-commercialization activities 
• Coverage: Expenditures related to various pre-commercialization activities, such as testing, technological validation, and studies conducted to meet regulatory or certification requirements 
• Administration: Revenu Québec 

The Stacking Advantage: Quebec companies can now claim both federal SR&ED and provincial CRIC for the same eligible activities, creating combined effective rates that can exceed 50% for qualifying expenditures. 

Revolutionary Changes: What Makes CRIC Different 

1. Universal Access Regardless of Company Size

The new rates apply to all corporations, irrespective of their ownership or assets, making it easier for businesses to budget cashflows and access the tax credit. Unlike the previous Quebec system where rates varied from 14% to 30% based on company characteristics, CRIC offers the same enhanced rates to startups and multinational corporations alike. 

2. Pre-Commercialization Coverage: Bridging the Valley of Death

This is CRIC's most significant innovation. Traditionally, SR&ED tax credits in Quebec only applied up to the resolution of a technological uncertainty, which is often the end of a project's core R&D phase. However, businesses will now be able to claim expenditures related to various pre-commercialization activities, including: 

• Regulatory testing and certification processes 
• Product design and industrial design activities 
• Technological validation and pilot production 
• Market studies required for commercialization 
• Prototype refinement and testing 

This addresses the critical funding gap that exists between R&D completion and market entry (the notorious "valley of death" that kills many promising innovations). 

3. Capital Expenditure Revolution

For the first time in many years, capital expenditures used in R&D, such as depreciable equipment used in labs and software development, are now eligible for tax credits. This represents a massive advantage over federal SR&ED, which has historically excluded most capital expenditures. 

Quebec companies can now claim CRIC credits on: 

• R&D laboratory equipment 
• Software development infrastructure 
• Specialized manufacturing equipment for prototyping 
• Testing and validation equipment 

4. Simplified Rate Structure with Powerful Incentives

The new two-tier system eliminates confusion while maximizing benefits: 

• Tier 1: 30% on first $1M (enhanced rate for substantial initial investment) 
• Tier 2: 20% on excess (still higher than most previous Quebec rates) 

5. Fully Refundable: Cash Flow Revolution for Startups

Unlike many tax credits that require companies to have tax liability, CRIC is fully refundable. This means even pre-revenue startups receive cash refunds, transforming how early-stage companies access non-dilutive capital. 

Strategic Program Integration: Maximizing Your Non-Dilutive Capital Stack 

The Triple Threat: CRIC + SR&ED + CDAEIA 

For Quebec-based innovative companies, 2025 creates an unprecedented opportunity to stack funding programs: 

Optimal Program Combination Strategy: 

Federal SR&ED (35% CCPCs/15% others) 

• Claim experimental development and technological uncertainty resolution 
• Focus on breakthrough research and systematic investigation 
• Leverage enhanced $4.5M expenditure limit and restored capital expenditures 

Provincial CRIC (30%/20%) 

• Claim same R&D activities under Quebec's harmonized definition 
• Add pre-commercialization activities not covered by SR&ED 
• Include capital expenditures for Quebec R&D equipment 

CDAEIA for AI Companies (30% total) 

• AI integration and implementation activities 
• Ongoing AI development and enhancement 
• Quebec-specific AI business solutions 

Real-World Impact Example: A Quebec AI company with $2M in eligible R&D expenditures could potentially access: 

• Federal SR&ED: $700,000 (35% × $2M) 
• Provincial CRIC: $500,000 (30% × $1M + 20% × $1M) 
• CDAEIA: Additional credits for AI-specific activities 
• Total potential support: $1.2M+ on $2M investment 

Evolution Timeline: Quebec's Strategic Innovation Vision 

2008-2024: The Fragmented Era 

• Multiple separate Quebec R&D programs 
• Asset-based restrictions limiting access 
• Administrative complexity deterring participation 
• Rates varying from 14-30% based on company characteristics 

March 25, 2025: The CRIC Revolution 

• For taxation years beginning after March 25, 2025, Quebec will consolidate various previously existing R&D tax credits 
• Universal 30%/20% rate structure regardless of company size 
• Pre-commercialization activities now eligible 
• Capital expenditures included for first time in years 

2026 and Beyond: The New Quebec Advantage 

• Simplified single-program administration 
• Enhanced collaboration with federal SR&ED 
• Positioning Quebec as North America's innovation funding leader

Lifecycle Strategy: Maximizing CRIC Across Growth Stages 

Pre-Revenue Startups: The Fully Refundable Advantage 

CRIC's fully refundable structure makes it particularly powerful for early-stage companies: 

• Cash flow boost: Receive refunds even with zero tax liability 
• Pre-commercialization support: Fund product design, regulatory testing, and market validation 
• Equipment investments: Purchase R&D equipment with 30% cost recovery 
• University partnerships: Leverage 50% cost recovery on Quebec research collaborations 

Growth-Stage Companies ($1M-$10M): The Sweet Spot 

The $1M threshold at 30% creates powerful incentives for growing companies: 

• Strategic project clustering: Structure R&D activities to maximize 30% rate utilization 
• Commercialization bridge: Use pre-commercialization coverage to bridge R&D to market 
• Infrastructure investment: Build Quebec R&D capabilities with capital expenditure support 
• Talent retention: Enhanced salary coverage makes Quebec R&D teams more cost-effective 

Mature Companies ($10M+): The Universal Access Advantage 

Unlike previous Quebec programs, CRIC offers full benefits regardless of company size: 

• No asset restrictions: Large companies access same rates as startups 
• Dual program strategy: Coordinate CRIC with federal SR&ED for maximum benefit 
• Collaborative research: Enhanced support for university and research center partnerships 
• Global competitiveness: Quebec operations become more attractive for multinational R&D 

Implementation Roadmap: Capturing Maximum Value in 2025 

Q1 2025: Preparation Phase 

• Audit current R&D activities: Identify CRIC-eligible expenditures using new criteria 
• Documentation systems: Prepare for new exclusion threshold calculations and pre-commercialization tracking 
• Strategic planning: Structure 2025-2026 projects to optimize CRIC benefits 
• Partnership development: Establish relationships with Quebec universities and research centers 

Q2-Q3 2025: Transition Execution 

• Project restructuring: Align R&D activities with CRIC's expanded eligibility criteria 
• Equipment planning: Time capital expenditures for optimal CRIC utilization 
• Staff allocation: Document employee time allocation for new threshold calculations 
• Process integration: Coordinate CRIC with federal SR&ED and other programs 

Q4 2025 and Beyond: Optimization Phase 

• First CRIC claims: File initial claims for companies with March 2026+ fiscal year-ends 
• Results analysis: Assess CRIC impact compared to previous Quebec programs 
• Strategy refinement: Optimize future R&D planning based on CRIC experience 
• Competitive advantage: Leverage Quebec's enhanced funding environment for growth 

The Exclusion Threshold Revolution: Understanding the New Calculation 

CRIC introduces a sophisticated exclusion threshold that's more generous than previous systems: 

New Calculation Method: The exclusion threshold is now the greater of $50,000 or the basic personal amount per employee, prorated based on an employee's time spent on R&D activities 

Example Calculation (2025): 

• 10 full-time R&D employees 
• Basic personal amount: $18,751 
• Exclusion threshold: $187,510 (10 × $18,751) 
• Only expenditures above $187,510 qualify for credit 

Strategic Advantage: This employee-based system rewards companies with substantial R&D teams and ensures credits target genuine innovation investments rather than minimal activities. 

Competitive Landscape: Quebec's National Innovation Leadership 

North American Context Quebec's CRIC program now offers some of the most generous R&D incentives in North America: 

• Combined rates: 50%+ effective rates when stacked with federal programs 
• Comprehensive coverage: R&D through commercialization in single program 
• Universal access: No restrictions based on company size or ownership 
• Immediate cash flow: Fully refundable structure supports all company stages 

International Competitiveness CRIC positions Quebec to compete with global innovation hubs: 

• Singapore-level incentives: Comparable effective rates to top international programs 
• Broader coverage: Includes activities not covered by most international programs 
• Simplified access: Single program vs. complex multi-program structures elsewhere 
• Strategic focus: Aligned with Quebec's AI and advanced technology strengths 

Looking Forward: Quebec's Innovation Economy Vision 

Government Investment Commitment Quebec's $2.4 billion commitment to CRIC over five years signals long-term vision for innovation leadership. This represents a strategic bet on Quebec becoming North America's premier innovation jurisdiction. 

Economic Impact Projections Early projections suggest CRIC could: 

• Increase Quebec R&D investment by 15-20% 
• Attract additional multinational R&D operations 
• Support 10,000+ additional high-skilled innovation jobs 
• Generate significant IP commercialization through IDCI integration 

Strategic Ecosystem Development CRIC's enhanced support for university partnerships and collaborative research aims to build Quebec's innovation ecosystem by: 

• Strengthening industry-academia connections 
• Encouraging technology transfer and commercialization 
• Supporting development of innovation clusters 
• Attracting international research collaborations 

Action Plan: Maximizing Your 2025 CRIC Strategy 

Immediate Actions (Next 90 Days): 

1. Comprehensive R&D audit: Review all 2024-2025 activities for CRIC eligibility 
2. Documentation upgrade: Implement systems for tracking pre-commercialization activities and employee time allocation 
3. Partnership assessment: Evaluate potential collaborations with Quebec universities and research centers 
4. Integration planning: Coordinate CRIC strategy with federal SR&ED and other programs 

Medium-term Strategy (6-12 Months): 

1. Project restructuring: Align R&D initiatives with CRIC's expanded eligibility criteria 
2. Infrastructure investment: Plan equipment purchases to leverage capital expenditure eligibility 
3. Team optimization: Consider Quebec-based R&D team expansion given enhanced funding 
4. Commercialization pipeline: Develop systematic approach to pre-commercialization activities 

Long-term Positioning (1-3 Years): 

1. Innovation hub development: Establish Quebec as primary R&D center for enhanced funding access 
2. IP commercialization: Integrate CRIC with IDCI for end-to-end innovation-to-market strategy 
3. Competitive advantage: Leverage Quebec's funding advantage for accelerated innovation cycles 
4. Ecosystem participation: Become active participant in Quebec's enhanced innovation ecosystem 

The Bottom Line: Quebec's Innovation Funding Revolution 

Quebec's CRIC program represents the most significant evolution in Canadian provincial R&D funding in decades. By consolidating eight separate programs into a single, supercharged initiative, Quebec has created what's effectively a provincial version of SR&ED that's more generous, more accessible, and better aligned with modern innovation realities. 

For innovative businesses based in Quebec, CRIC isn't just another tax credit: It's a strategic advantage that can fundamentally change how you fund innovation. The combination of federal SR&ED and provincial CRIC creates funding opportunities that can support 50%+ of eligible R&D expenditures while extending coverage into pre-commercialization activities that other jurisdictions don't support. 

The message is clear: Quebec is betting big on innovation, and companies that understand and leverage CRIC will have a significant competitive advantage in the race to develop and commercialize next-generation technologies. 

The opportunity window is open now. With CRIC effective for taxation years beginning after March 25, 2025, innovative companies have a brief window to prepare their strategies and maximize their non-dilutive capital access. Those who act quickly and strategically will be best positioned to benefit from Quebec's innovation funding revolution.