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Provincial R&D Update - Saskatchewan and Quebec

Legislative progress of R&D measures announced in Saskatchewan and Quebec


R&D Tax Update, May 2009 (09-3)

Saskatchewan: Refundable tax credit enacted 

In order to facilitate the accessibility and to improve the effectiveness of the research and development (R&D) tax credit for, among others, small- and medium-sized businesses, the 2009-10 budget announced that the existing non-refundable tax credit would be converted to a 15% refundable tax credit for all qualifying expenditures incurred after the date of the budget, March 18, 2009.

On March 31, 2009, draft legislation (Bill 87) was tabled, introducing this refundable tax credit in the Saskatchewan Income Tax Act. The changes introduced by Bill 87 came into force on May 14, 2009, the date of the Royal Assent, and are generally applicable from March 19, 2009.

Eligibility rules and definitions remain unchanged and unclaimed non-refundable tax credit balances remain available to be claimed against taxes payable for the existing 10-year carryforward period.

Quebec: Draft legislation on measures announced in 2008
On May 7, 2009, draft legislation was tabled in Quebec in order to introduce, among others, R&D and innovation measures announced in the 2008-09 budget tabled in March 2008.

With respect to R&D, one of the most important measures introduced by Bill 37 is the increase to $3 million of the expenditure limit on which the enhanced rate of the tax credit on salaries and wages applies. This change is applicable for fiscal years ending after March 13, 2008, and is prorated for fiscal years that include that day.
In addition, Bill 37 introduces rules dealing with the new temporary refundable tax credit for the development of information technology. This tax credit, which an eligible corporation may claim until December 31, 2015, is equal to 30% of eligible salaries incurred as of March 14, 2008. The maximum amount of the tax credit that an eligible corporation may claim regarding an eligible employee, for a taxation year, is $20,000. 

About R&D Tax
Opportunities, issues and developments affecting the federal and provincial scientific research and experimental development tax incentive programs.



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