Finance minister Eric Girard tabled budget 2022-2023 on March 22nd, 2022. The budget includes several measures to address the rise of the cost of living for Quebec taxpayers, but also many interesting updates that innovative businesses headquartered in or with operations in the province of Quebec will want to be aware of.
The largest spending envelope identified in this year’s budget is the $8.9 billion earmarked for the restoration and the enhancement of Quebec social services and healthcare system by 2026-2027. A $4.2 billion spending package dedicated to fueling economic growth in the province comes second.
This article will mainly focus on identifying new or modified tax measures and how they will benefit Quebec businesses. We will also discuss some measures that have yet to be precisely defined, but are likely to lead to funding or opportunities for Quebec science and technology innovators.
General Research and Development Investments for 2022-2027
Within the $1.3 billion set aside by the Quebec government for the continuation of R&D efforts in the province, $500 million will be allocated to private equity funds and $100 million directly to the Impulsion PME Program. Both of these spending envelopes seek to encourage the development of even more innovative businesses in the province. (E.11)
Find the Impulsion PME Program in our funding search engine.
C3i Tax Credit Bonified Rates Further Extended Until December 31st 2023
The 2021-2022 Quebec budget introduced doubled base rates for the C3i tax credit, which were initially going to apply to eligible equipment purchased between March 25, 2021 and December 31st 2022. These doubled rates are now available until December 31st 2023. This gives eligible businesses another full year to make equipment and software package purchases and benefit from the doubled tax credit rates. (E.28)
Read our full article on the C3i tax credit to learn more about the eligibility criteria and the types of expenses that qualify here.
Launch of a New Cybersecurity Enhancement Program
While the budget states that details will be communicated by the appropriate bodies at a later date, we know that a total of $100 million – $30 million in 2022-3 and $70 million in 2023-4 – have been set aside for the creation of a new program to fund initiatives aiming to strengthen cybersecurity in Quebec. (E.25)
Projects will be deployed in public bodies with the goal of helping the government ensure its digital transformation, protect citizens’ information and ready themselves in the case of cyberattacks.
Supporting the Bio Food and Forestry Sectors
The Financière Agricole du Québec (FADQ) will receive an additional $50 million over the next two years to continue funding eligible projects through its Growth Investment Program. Its strategic investment subsidiary known as Capital Financière Agricole will also receive $10 million more in capitalization to continue to support a variety of food processing and agri-food related innovative projects. (E.47)
Innovation Bois, a program created to support innovation in the forestry sector, will also receive an additional $75 million in funding to increase productivity and support the sector’s diversification.
New Biofuel and Pyrolisis Oil Production Tax Credits
Two brand new biofuel and pyrolisis oil production tax credits will replace three previous refundable tax credits: one for the production of ethanol in Quebec, one for the production of cellulosic ethanol in Quebec, and one for the production of biodiesel fuel in Quebec. All three will expire on March 31, 2023. (F.14)
The new tax credits’ assistance amounts will be calculated based on the carbon intensity reduction offered by the biofuel, ethanol or pyrolysis oil produced compared to the use of an equivalent quantity of regular fossil fuels. Additional details have yet to be released.
How R&D Partners can help
If you have any questions about funding for innovative companies in Quebec, do not hesitate to contact Jacob Ma at [email protected].
This article is intended for general informational purposes only and does not constitute professional accounting or tax advice.