A committed Quebec
The new Quebec Economic Plan was released by the Ministry of Finance on March 22, 2023, following the speech by the Finance Minister, Eric Girard.
Through the 2023-2024 budget, the Quebec government continues its approach from the past four years and establishes the basis for its actions for the next four years. This year’s measures revolve around four major areas: the economy, education, health, and the environment, while maintaining a prudent and responsible financial framework. Among the proposed measures, almost 1 billion dollars will be allocated to increase the productivity of businesses. This will be achieved through intensified efforts in innovation and digitalization.
FI Group provides an overview of the main elements related to R&D and innovation in connection with this new economic plan.
1. No modifications on the attribution methods on E-business (CDAE) and SR&ED programs
The new economic plan did not lead to major changes in the methods for allocating tax credits for SR&ED and CDAE tax credits. The rules during the previous year therefore remain in force regarding the obtaining, and monitoring of these tax credits.
The SR&ED tax measures therefore still represent 30% of eligible R&D expenditures for SMEs and 14% for large corporations. R&D tax credits will provide support of over $2.7 billion to Quebec businesses during 2022-2027, benefiting approximately 4 000 businesses annually.
2. Intensify Efforts in Innovation
To increase Quebec’s productivity, the government is focusing on improving its performance in research, innovation, and commercialization, particularly through the creation of innovative companies and the acceleration of their development. The 2023-2024 budget therefore includes $272.7 million over five years, including
- $100 million over five years to continue deploying innovation zones. Two innovation zones have already been launched in Quebec in 2022 (DistriQ in Sherbrooke in the field of quantum science and Technum Quebec in Bromont in the digital technology sectors),
- $55 million over three years to support research and development partnerships and establish technological showcases in the field of transportation,
- $30 million over three years to support green transition and decarbonization of the economy by supporting companies that develop and market clean technologies,$12 million over five years to continue funding life science companies through the BioMed Propulsion program,
- An additional $15.4 million over the next seven years to support the FinTech Station, a center of excellence in financial technology, to allow it to pursue its mission and expand its offices to accommodate 15 to 20 additional emerging companies.
3. Promote Business Growth, Digitization, and Exports
In a context of labor shortage, business growth will come through digitization. Additionally, the limited size of the Quebec local market drives companies to intensify their presence in export markets in order to accelerate their development. To support businesses in these efforts, a budget of $201.9 million over five years is planned, including
- $70 million over three years starting in 2024-2025 to extend the Cybersecurity Enhancement Program and deploy cybersecurity projects within government agencies,
- An additional $50 million over two years to continue the Digital Transformation Offensive, which has already supported 25 initiatives that will help more than 15,000 businesses in their digital transformation,
- An additional $25 million over two years for the Commercialization Support Program to help Quebec companies integrate global supply chains and increase their presence in foreign markets.
4. Support the growth of the bio-food sector
The bio-food sector plays a crucial role in the Quebec economy and the government aims to support its growth through initiatives totaling $813.1 million over five years, including
- $615.5 million over three years starting in 2025-2026 to continue the efforts of the 2018-2025 biofood policy entitled “Alimenter notre monde”, which is based on programs that support research and innovation projects,
- 175.0 million over five years to increase the amount of money available for MAPAQ programs that support, among other things, innovation and robotization projects aimed at increasing the productivity of the agri-food sector.
The FI Group team is available for any further information you may have.