Update on Québec's Economic and Financial Situation
INFORMATION BULLETIN
November 7, 2023
AMENDMENTS TO THE TAX CREDIT RELATING TO INVESTMENT
1.
AND INNOVATION
2023-6
On March 10, 2020,1 the tax credit relating to investment and innovation was introduced to
encourage productivity gains of businesses in all regions of Québec, while further promoting
investments in regions where the economic vitality index is lower.
Briefly, the tax credit relating to investment and innovation is currently granted to a qualified
corporation² that acquires, after March 10, 2020, and before January 1, 2025, manufacturing or
processing equipment, general-purpose electronic data processing equipment or qualified
management software packages. It is calculated on the portion of specified expenses incurred to
acquire a specified property in excess of $5000 or $12 500, depending on the nature of the
property.3
The specified expenses in respect of which a qualified corporation may claim the tax credit may
not, however, exceed a cumulative limit of $100 million calculated over a five-year period.
The tax credit relating to investment and innovation to which a qualified corporation is entitled, for
a taxation year, may be refundable, in whole or in part, or non-refundable. The refundable portion
of the tax credit is determined based on the qualified corporation's assets and gross income.
The rate of the tax credit available to a qualified corporation in respect of a specified property is
established based on the territory where the property is acquired to be used mainly, namely a
territory with low economic vitality, 4 a territory with intermediate economic vitality5 or a territory
with high economic vitality.6
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MINISTÈRE DES FINANCES DU QUÉBEC, Budget 2020-2021 - Additional Information, March 10, 2020, pp. A.3-A.18.
A qualified corporation that is a member of a qualified partnership may, under certain conditions, claim the tax
credit relating to investment and innovation on its share of specified expenses incurred by the qualified
partnership.
The $5 000 exclusion threshold applies in respect of a specified property that is general-purpose electronic data
processing equipment or a qualified management software package. The $12 500 exclusion threshold applies
to other specified property.
Prior to the changes announced in this information bulletin, the expression "territory with low economic vitality"
refers to one of the following regional county municipalities (RCMs): Antoine-Labelle, Argenteuil, Avignon,
Bonaventure, Charlevoix-Est, La Haute-Côte-Nord, La Haute-Gaspésie, La Matanie, La Matapédia, La Mitis,
La Vallée-de-la-Gatineau, Le Domaine du Roy, Le Golfe-du-Saint-Laurent, Le Rocher-Percé, Les Appalaches,
Les Basques, Les Etchemins, Les Sources, Maria-Chapdelaine, Maskinongé, Matawinie, Mékinac, Papineau,
Pontiac, Témiscamingue et Témiscouata, as well as the urban agglomeration of La Tuque and the city of
Shawinigan. (See MINISTÈRE DES FINANCES DU QUÉBEC, Information Bulletin 2023-4, June 27, 2023, pp. 13-15).
The expression "territory with intermediate economic vitality" refers to a territory in Québec that is neither a
territory with high economic vitality nor a territory with low economic vitality.
The expression "territory with high economic vitality" refers to a municipality listed in Schedule I to the Act
respecting the Communauté métropolitaine de Montréal (CQLR, chapter C-37.01) or in Schedule A to the Act
respecting the Communauté métropolitaine de Québec (CQLR, chapter C-37.02).
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