Légis Québec

Consolidated Statutes and Regulations Consolidated Statutes Consolidated Regulations Annual Statutes and Regulations Annual Statutes Annual Regulations Additional information Québec Official Publisher What’s new? Information note Policy of the Minister of Justice Laws: Amendments Laws: Provisions not in force Laws: Provisions brought into force Annual Statutes: PDF versions since 1996 Regulations: Amendments Annual Regulations: PDF versions since 1996 Court Decisions

P-5.1 - Act respecting the sectoral parameters of certain fiscal measures

Full text

In force date

2023-04-01 Show full text at this date

SCHEDULE C

MINISTER OF ECONOMY AND INNOVATION

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. The Minister of Economy and Innovation administers the sectoral parameters of the following fiscal measures:

(1) the deferral of the taxation of a qualified patronage dividend provided for in sections 726.27 to 726.29 of the Taxation Act (chapter I-3);

(1.1) the deduction in respect of a foreign researcher provided for in sections 737.19 to 737.22 of the Taxation Act;

(1.2) the deduction in respect of foreign experts provided for in sections 737.22.0.0.5 to 737.22.0.0.8 of the Taxation Act;

(2) (paragraph repealed);

(3) (paragraph repealed);

(4) the deduction in respect of the second cooperative investment plan provided for in sections 726.4 and 965.39.1 to 965.39.7 of the Taxation Act;

(4.1) the refundable tax credit for university research and for research carried on by a public research centre or a research consortium and the tax credit for fees and dues paid to a research consortium provided for in sections 1029.8.1 to 1029.8.7 and 1029.8.9.0.2 to 1029.8.9.0.4 of the Taxation Act;

(4.2) the tax credit for private partnership pre-competitive research provided for in sections 1029.8.16.1.1 to 1029.8.16.1.9 of the Taxation Act;

(5) (paragraph repealed);

(6) (paragraph repealed);

(7) the design tax credit provided for in sections 1029.8.36.4 to 1029.8.36.28 of the Taxation Act;

(8) the tax credit for the construction or conversion of vessels and the tax holiday on capital in respect of the construction or conversion of vessels provided for in sections 1029.8.36.54 to 1029.8.36.59, 1130, 1137, 1137.1, 1137.1.1 and 1137.7 of the Taxation Act;

(9) the tax holiday for a corporation dedicated to the commercialization of intellectual property provided for in sections 771, 771.1, 771.1.1, 771.8.5.1, 771.14 and 771.15 of the Taxation Act;

(10) the tax exemption in relation to a tax-free reserve of a qualified shipowner provided for in section 726.4.0.2 of the Taxation Act and in Title X of Book VII of Part I of that Act;

(11) the tax credit for university research and for research carried on by a public research centre or a research consortium provided for in sections 1029.8.1 to 1029.8.7 of the Taxation Act;

(12) the tax credit for the production of pyrolysis oil in Québec provided for in sections 1029.8.36.0.106.7 to 1029.8.36.0.106.14 of the Taxation Act; and

(13) the tax credit for the production of biofuel in Québec provided for in sections 1029.8.36.0.106.15 to 1029.8.36.0.106.23 of the Taxation Act.

CHAPTER II

SECTORAL PARAMETERS OF DEFERRAL OF TAXATION OF QUALIFIED PATRONAGE DIVIDEND

DIVISION I

INTERPRETATION AND GENERAL

2.1. In this Chapter,

“deferral of the taxation of a qualified patronage dividend” means the fiscal measure provided for in Title VI.9 of Book IV of Part I of the Taxation Act, under which a person may defer the taxation of a patronage dividend until the disposition of the related preferred share.

“shareholding workers cooperative” has the meaning assigned by the first paragraph of section 2 of the Cooperative Investment Plan Act (chapter R-8.1.1);

2.2. A cooperative or a federation of cooperatives must obtain a certificate from the Minister so that the patronage dividends it allocates in respect of a taxation year in the form of preferred shares may give rise to the deferral of the taxation of a qualified patronage dividend.

DIVISION II

CERTIFICATE

2.3. The period of validity of a certificate may begin in a taxation year preceding the taxation year in which the application for the certificate was filed, provided the application was filed with the Minister at or before the end of the twelfth month following the date on which that preceding taxation year ended.

2.4. An application for a certificate must be accompanied by

(1) a statement, signed by two directors or officers of the cooperative or federation of cooperatives having filed the application, certifying either that the cooperative meets the criteria set out in subparagraphs 1 and 2 of the first paragraph of section 2.6 and, if applicable, in the third paragraph of that section, or that the federation of cooperatives meets the criteria set out in subparagraphs 1 and 2 of the first paragraph of section 2.7, as the case may be; and

(2) any other information required in relation to the qualification of the cooperative or federation of cooperatives.

2.5. A certificate issued to a cooperative or a federation of cooperatives under this chapter confirms that the cooperative or federation of cooperatives is recognized as a qualified cooperative for the purposes of the deferral of the taxation of a qualified patronage dividend. The Minister specifies in the certificate the taxation year as of which the certificate is valid.

2.6. A cooperative governed by the Cooperatives Act (chapter C-67.2) may be recognized as a qualified cooperative if

(1) it meets the conditions of subparagraphs 1 and 2 of the first paragraph of section 3 of the Cooperative Investment Plan Act;

(2) the majority of its members are either domiciled in Québec if they are natural persons, or have an establishment in Québec, in other cases; and

(3) the Minister is of the opinion that the cooperative is in compliance with the Cooperatives Act.

Supporting members, auxiliary members and associate members, within the meaning assigned to those expressions by the Cooperatives Act, are not members for the purposes of subparagraph 2 of the first paragraph.

In addition, if the cooperative referred to in the first paragraph is a shareholding workers cooperative, the corporation in which it holds shares and that employs its members must also meet the condition of subparagraph 1 of the second paragraph of section 3 of the Cooperative Investment Plan Act.

2.7. A federation of cooperatives governed by the Cooperatives Act may be recognized as a qualified cooperative if

(1) it meets the conditions of paragraphs 1 and 2 of section 4 of the Cooperative Investment Plan Act;

(2) the majority of its members are either domiciled in Québec if they are natural persons, or have an establishment in Québec, in other cases; and

(3) the Minister is of the opinion that the federation is in compliance with the Cooperatives Act.

For the purposes of subparagraph 2 of the first paragraph, “member” does not include an auxiliary member within the meaning assigned by the Cooperatives Act.

2.8. A cooperative or federation of cooperatives governed by the Canada Cooperatives Act (S.C. 1998, c. 1) may also be recognized as a qualified cooperative if it meets the conditions of section 2.6 or 2.7, as applicable, and complies with the same requirements as those imposed on a cooperative or a federation of cooperatives under the Cooperatives Act.

DIVISION III

REVOCATION OF CERTIFICATE

2.9. The Minister is justified in revoking a certificate issued to a cooperative or a federation of cooperatives if

(1) the cooperative or federation of cooperatives has been required to produce a cooperative compliance program under section 185.5 of the Cooperatives Act or has failed to produce such a program or to implement it within the time prescribed;

(2) the cooperative or federation of cooperatives has omitted to send any document required for the purposes of this Act; or

(3) the cooperative or federation of cooperatives did not send a copy of its annual report within the time prescribed, as required by the Cooperatives Act.

2.9.1. The certificate of a cooperative or a federation of cooperatives issued under this chapter is deemed to be revoked on the date of its dissolution or, if the cooperative or federation of cooperatives is dissolved under the Act respecting the legal publicity of enterprises (chapter P-44.1), the Cooperatives Act or the Canada Cooperatives Act or has decided to wind-up in accordance with the Cooperatives Act or the Canada Cooperatives Act, on the date on which its liquidation was decided.

2.9.2. The certificate of a cooperative or a federation of cooperatives issued under this chapter is deemed to be revoked on the effective date of an amalgamation to which the cooperative or federation of cooperatives is party

(1) that is carried out in accordance with the rules set out in Division II or Division V of Chapter XXI of Title I of the Cooperatives Act;

(2) that is carried out in accordance with the rules set out in Division III of that Chapter XXI, where the cooperative or federation of cooperatives is the absorbed cooperative or federation;

(3) that is carried out in accordance with the rules set out in sections 295 to 297 of the Canada Cooperatives Act;

(4) that is carried out in accordance with the rules set out in subsection 1 of section 298 of that Act, where the cooperative or federation of cooperatives is a wholly-owned subsidiary cooperative; or

(5) that is carried out in accordance with the rules set out in subsection 2 of that section 298, where the cooperative or federation of cooperatives is a subsidiary whose shares have been cancelled.

2.10. A cooperative or federation of cooperatives whose certificate has been revoked may not obtain a new certificate before the expiry of a 36-month period following the effective date of the revocation.

CHAPTER III

SECTORAL PARAMETERS OF DEDUCTION IN RESPECT OF FOREIGN RESEARCHERS

DIVISION I

INTERPRETATION AND GENERAL

3.1. In this chapter, unless the context indicates otherwise,

“eligible employer” means a person or partnership who declares to the Minister that the person or partnership is carrying on a business in Canada and undertaking or causing to be undertaken on the person’s or partnership’s behalf in Québec scientific research and experimental development related to a business of the person or partnership and that the person or partnership is neither an eligible university entity within the meaning of section 2.1 of Schedule D, nor an eligible public research centre within the meaning of that section 2.1, nor a person exempt from tax under section 984 or 985 of the Taxation Act or that would be exempt from tax under that section 985 but for section 192 of that Act;

“foreign researcher tax holiday” means the fiscal measure provided for in Title VII.3 of Book IV of Part I of the Taxation Act, under which an individual may deduct an amount in computing the individual’s taxable income for a taxation year.

3.2. In order for an individual who works for an eligible employer to benefit from the foreign researcher tax holiday for a taxation year, the eligible employer must obtain a qualification certificate in respect of the foreign researcher (in this chapter referred to as a “researcher qualification certificate”) from the Minister.

The employer must file an application for the qualification certificate before 1 March of the calendar year that follows the individual’s taxation year for which he or she first claims the tax holiday.

DIVISION II

RESEARCHER QUALIFICATION CERTIFICATE

3.3. A researcher qualification certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized as a researcher.

3.4. To be recognized as a researcher, an individual must

(1) be specialized in the field of pure or applied science or a related field;

(2) hold, or possess knowledge equivalent to the knowledge acquired by the holder of, a Master’s degree recognized by a Québec university in any of the fields referred to in paragraph 1; and

(3) have the skills required to carry out scientific research and experimental development activities.

3.5. An eligible employer to which a researcher qualification certificate is issued must promptly send a copy of the certificate to the individual concerned so that it may be attached to his or her fiscal return.

CHAPTER IV

SECTORAL PARAMETERS OF DEDUCTION IN RESPECT OF FOREIGN EXPERTS

DIVISION I

INTERPRETATION AND GENERAL

4.1. In this chapter, unless the context indicates otherwise,

“eligible employer” means a person or partnership who declares to the Minister that the person or partnership is carrying on a business in Canada for the period in which the person or partnership undertakes or causes to be undertaken on the person’s or partnership’s behalf in Québec, as part of a project, scientific research and experimental development related to a business of the person or partnership, as well as for the periods preceding and following the carrying out of the project, and that the person or partnership is neither an eligible university entity within the meaning of section 2.1 of Schedule D, nor a person mentioned in section 984 or 985 of the Taxation Act;

“foreign expert tax holiday” means the fiscal measure provided for in Title VII.3.0.2 of Book IV of Part I of the Taxation Act, under which an individual may deduct an amount in computing the individual’s taxable income for a taxation year.

4.2. In order for an individual who works for an eligible employer to benefit from the foreign expert tax holiday for a taxation year, the eligible employer must obtain a qualification certificate in respect of the individual (in this chapter referred to as an “expert qualification certificate”) from the Minister. The certificate must be obtained for each taxation year for which the individual may claim the tax holiday.

The employer must file an application for the qualification certificate before 1 March of the calendar year that follows the individual’s taxation year concerned.

DIVISION II

EXPERT QUALIFICATION CERTIFICATE

4.3. An expert qualification certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized as an expert in respect of the employer for the taxation year for which the application for the qualification certificate was made or for the part of the year specified in it.

4.4. In order for an individual to be recognized as an expert in respect of an eligible employer, the individual must

(1) be specialized in a field appropriate to the valorization of scientific research and experimental development results;

(2) hold, or possess knowledge equivalent to the knowledge acquired by the holder of, a diploma recognized by a Québec university in a field referred to in paragraph 1;

(3) have the skills required to carry out activities that consist in the valorization of the results deriving from the employer’s scientific research and experimental development projects, which activities include

(a) the management of innovation resulting from those projects,

(b) the commercialization and marketing of the results deriving from those projects,

(d) the financing of scientific research and experimental development activities; and

(4) have duties with the employer that consist exclusively or almost exclusively, on a continuous basis, in carrying on activities that consist in the valorization of the results deriving from the employer’s scientific research and experimental development projects.

4.5. If an individual is temporarily absent from work for reasons the Minister considers reasonable, the Minister may, for the purpose of determining whether the individual meets the conditions for recognition as an expert in respect of an eligible employer, consider that the individual continued to perform his or her duties throughout the period of absence exactly as he or she was performing them immediately before the beginning of that period.

4.6. An eligible employer to which an expert qualification certificate is issued for a taxation year must promptly send a copy of the certificate to the individual concerned so that it may be attached to his or her fiscal return for the year.

CHAPTER V

SECTORAL PARAMETERS OF DEDUCTION IN RESPECT OF SECOND COOPERATIVE INVESTMENT PLAN

DIVISION I

INTERPRETATION AND GENERAL

5.1. In this chapter, “capitalization rate”, “expansion or development project”, “qualified cooperative”, “qualified federation of cooperatives”, “shareholding workers cooperative”, “solidarity cooperative”, “supporting member” and “work cooperative” have the meaning assigned by the first paragraph of section 2 of the Cooperative Investment Plan Act, and “qualified investor” has the meaning assigned by section 9 of that Act.

Similarly, “deduction in respect of the second cooperative investment plan” means the fiscal measure provided for in Title VI.3 of Book IV of Part I of the Taxation Act and in Title VI.3.1 of Book VII of that Part, under which an individual may deduct an amount in computing his or her taxable income for a taxation year, in respect of a preferred share, issued for the purposes of the Cooperative Investment Plan Act, that the individual acquired or is deemed to have acquired.

5.2. A cooperative or a federation of cooperatives must obtain a qualification certificate from the Minister to be authorized to issue, for the purposes of the Cooperative Investment Plan Act, preferred shares the acquisition of which may allow individuals to benefit from the deduction in respect of the second cooperative investment plan.

DIVISION II

QUALIFICATION CERTIFICATE

5.3. An application for a qualification certificate authorizing a cooperative or a federation of cooperatives to issue preferred shares for the purposes of the Cooperative Investment Plan Act must be accompanied by

(1) an excerpt from the by-law of the cooperative or federation of cooperatives authorizing the issue of preferred shares;

(2) a copy of the resolution of the board of directors determining how the preferred shares are to be issued;

(3) a statement signed by two directors certifying that the conditions of subparagraphs 1 to 4 of the first paragraph of section 3 of the Cooperative Investment Plan Act or paragraphs 1 to 4 of section 4 of that Act have been met;

(4) a statement signed by two directors certifying that the conditions of the second paragraph of section 3 of the Cooperative Investment Plan Act have been met;

(5) the following information and documents:

(a) a certificate signed by the auditor of the books of the cooperative or federation of cooperatives certifying that its capitalization rate is less than 60%, except in the case of

i. a shareholding workers cooperative, or

ii. a work cooperative, or a solidarity cooperative that would be a work cooperative but for its supporting members, the majority of whose employees are seasonal workers, or

(b) the information and documents specified in the second paragraph in respect of an expansion or development project;

(6) a certificate signed by the auditor of the books of the cooperative or federation of cooperatives certifying that the condition of subparagraph 6 of the first paragraph of section 3 of the Cooperative Investment Plan Act or paragraph 6 of section 4 of that Act has been met;

(7) a copy of the last annual report of the cooperative or federation of cooperatives, subject, in the case of a cooperative, to the third paragraph of section 3 of the Cooperative Investment Plan Act; and

(8) any other information required in relation to the qualification of the cooperative or federation of cooperatives.

The information and documents to which subparagraph b of subparagraph 5 of the first paragraph refers in respect of an expansion or development project are the following:

(1) a detailed description of the project;

(2) the date on which the project is to begin;

(3) the expected value of the share issue in relation to the total cost of the project; and

(4) a statement signed by two directors confirming that the cooperative or federation of cooperatives is in the process of carrying out the project in accordance with the information and documents referred to in subparagraphs 1 to 3 and confirming the effect of the project on the capitalization rate and the volume of business of the cooperative or federation of cooperatives.

5.4. A qualification certificate issued to a cooperative or a federation of cooperatives under this chapter certifies that the cooperative or federation of cooperatives is authorized to issue preferred shares for the purposes of the Cooperative Investment Plan Act. If applicable, the qualification certificate also specifies that the authorization results from an exemption obtained in accordance with section 17 of that Act.

If a qualification certificate is issued under this chapter by reason of an exemption obtained in accordance with section 17 of the Cooperative Investment Plan Act, its period of validity ends at the expiry of the 12-month period that follows its date of issue.

5.5. The Minister issues a qualification certificate to a cooperative or a federation of cooperatives under this chapter if the Minister is of the opinion, as applicable, that

(1) the cooperative is a qualified cooperative;

(2) the federation of cooperatives is a qualified federation of cooperatives; or

(3) the cooperative or federation of cooperatives, as the case may be, meets the requirements of section 5 of the Cooperative Investment Plan Act.

DIVISION III

REVOCATION OF QUALIFICATION CERTIFICATE

5.6. The Minister is justified in revoking a qualification certificate issued to a cooperative or a federation of cooperatives under this chapter or the Cooperative Investment Plan Act, if

(1) the cooperative or federation of cooperatives has issued securities to an investor who is not a qualified investor;

(2) the cooperative or federation of cooperatives, knowingly or under circumstances amounting to gross negligence, has made a false statement or omitted to enter important information in any document required for the purposes of the Cooperative Investment Plan Act or in any information return it is required to file with the Minister of Revenue under section 1086 of the Taxation Act;

(3) the cooperative or federation of cooperatives has omitted to send any document required for the purposes of this Act or the Cooperative Investment Plan Act;

(4) the cooperative or federation of cooperatives, being governed by the Cooperatives Act or the Canada Cooperatives Act, did not send a copy of its annual report within the time prescribed, as required by the Cooperatives Act or the Cooperative Investment Plan Act;

(5) the cooperative or federation of cooperatives was constituted or organized primarily to take advantage of the cooperative investment plan and not to serve its object; or

(6) the cooperative or federation of cooperatives has been required to produce a cooperative compliance program under section 185.5 of the Cooperatives Act or has failed to produce such a program or to implement it within the time prescribed.

5.6.1. The Minister is justified in revoking a qualification certificate issued to a shareholding workers cooperative if, at any time, it does not invest all of the amount collected from its members as of that time in any of, or a combination of, the following:

(1) a share or a debt obligation of the legal person that employs its members;

(2) a deposit with a chartered bank or a financial institution authorized to receive deposits; or

(3) a property described in any of paragraphs 2, 3, 4, 5 and 10 of article 1339 of the Civil Code.

For the purposes of the first paragraph, the amount collected at any time by a shareholding workers cooperative from its members means all of the amounts paid in respect of the securities that are issued by the cooperative under the Cooperative Investment Plan Act and under the cooperative investment plan enacted by Order in Council 1596-85 (1985, G.O. 2, 5580, in French only) and that are outstanding at that time.

5.7. The effective date of the revocation of a qualification certificate issued under this chapter or under the Cooperative Investment Plan Act may not be earlier than the date of the notice of revocation. The notice must be sent to the head office of the cooperative or federation of cooperatives by registered mail.

5.8. The qualification certificate of a cooperative or a federation of cooperatives issued under this chapter or under the Cooperative Investment Plan Act is deemed to be revoked on the date of its dissolution or, if the cooperative or federation of cooperatives is dissolved under the Act respecting the legal publicity of enterprises, the Cooperatives Act or the Canada Cooperatives Act or has decided to wind-up in accordance with the Cooperatives Act or the Canada Cooperatives Act, on the date on which its liquidation was decided.

5.9. The qualification certificate of a cooperative or a federation of cooperatives issued under this chapter or under the Cooperative Investment Plan Act is deemed to be revoked on the effective date of an amalgamation to which the cooperative or federation of cooperatives is party

(1) that is carried out in accordance with the rules set out in Division II or Division V of Chapter XXI of Title I of the Cooperatives Act;

(2) that is carried out in accordance with the rules set out in Division III of that Chapter XXI, where the cooperative or federation is the absorbed cooperative or federation;

(3) that is carried out in accordance with the rules set out in sections 295 to 297 of the Canada Cooperatives Act;

(4) that is carried out in accordance with the rules set out in subsection 1 of section 298 of that Act, where the cooperative or federation is a wholly-owned subsidiary cooperative; or

(5) that is carried out in accordance with the rules set out in subsection 2 of that section 298, where the cooperative or federation is a subsidiary whose shares have been cancelled.

5.10. A cooperative or federation of cooperatives whose qualification certificate has been revoked may not obtain a new qualification certificate before the expiry of a 36-month period following the effective date of the revocation.

CHAPTER VI

SECTORAL PARAMETERS OF TAX CREDIT FOR RESEARCH CARRIED ON BY RESEARCH CONSORTIUM AND OF TAX CREDIT FOR FEES AND DUES PAID TO RESEARCH CONSORTIUM

DIVISION I

INTERPRETATION AND GENERAL

6.1. In this chapter, unless the context indicates otherwise,

“research consortium” means a non-profit private research centre established in Canada whose members carry on businesses in the same sector of activity or in related sectors of activity;

“tax credit for fees and dues paid to a research consortium” means the fiscal measure provided for in Division II.2.1 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a person is deemed to have paid an amount to the Minister of Revenue on account of the person’s tax payable under that Part for a taxation year;

“tax credit for research carried on by a research consortium” means the fiscal measure provided for in Division II.1 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a person is deemed to have paid an amount to the Minister of Revenue on account of the person’s tax payable under that Part for a taxation year.

6.2. To be recognized as an eligible research consortium, for the purposes of the tax credit for research carried on by a research consortium and the tax credit for fees and dues paid to a research consortium, a body must obtain a certificate in its respect (in this chapter referred to as a “consortium certificate”) from the Minister.

DIVISION II

CONSORTIUM CERTIFICATE

6.3. A consortium certificate issued to a body certifies that the body is recognized as an eligible research consortium. Such a certificate is valid for an indeterminate period, unless otherwise specified in the certificate.

6.4. In order for a body to be recognized as an eligible research consortium, it must be a research consortium in respect of which the following conditions are met:

(1) the number of members forming the research consortium and their financial contribution are sufficiently representative of a sector of activity;

(2) the public or parapublic bodies operating in that sector of activity that are members of the research consortium do not constitute a majority of its members and do not provide the major part of its financing;

(3) the association agreement of the members of the research consortium requires that a research program concerning the members’ scientific and technological interests be established every year, and provides that the research results obtained will be available to all the members for use and development according to their specific needs;

(4) the mission of the research consortium is to carry on scientific research and experimental development work in Québec that is generic in nature and is not likely to lead to readily marketable results;

(5) the results of scientific research and experimental development work carried on by the research consortium may give rise to applications in various industrial sectors or to products that are commercially different among its members and that vary according to the use and development each may make of those results; and

(6) the research consortium has employees who have the skills required to carry on scientific research and experimental development work and has the premises and equipment needed to carry on that work in Québec.

The condition of subparagraph 3 of the first paragraph is not considered met if the association agreement does not clearly define the manner in which the research results obtained may be used and developed by the members of the research consortium.

The Minister may recognize only one research consortium per sector of activity.

6.5. A body that holds a valid consortium certificate must file a notice of change of status with the Minister if

(1) a change that has occurred in its human or physical resources could compromise its capacity to carry out scientific research and experimental development work;

(2) the composition of the consortium has changed significantly; or

(3) the association agreement of the members of the consortium or the consortium’s mission has been modified.

If a body fails to fulfil its obligation to file a notice of change of status, the Minister may revoke the consortium certificate issued to it.

CHAPTER VII

SECTORAL PARAMETERS OF TAX CREDIT FOR PRIVATE PARTNERSHIP PRE-COMPETITIVE RESEARCH

DIVISION I

INTERPRETATION AND GENERAL

7.1. In this chapter, unless the context indicates otherwise,

“research project” means a scientific research and experimental development project;

“tax credit for private partnership pre-competitive research” means the fiscal measure provided for in Division II.3.0.1 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a person is deemed to have paid an amount to the Minister on account of the person’s tax payable under that Part for a taxation year.

7.2. To benefit from the tax credit for private partnership pre-competitive research, in respect of a research project, a person or, if the person claims the tax credit as a member of a partnership, the partnership must obtain a certificate in that respect (in this chapter referred to as a “research project certificate”) from the Minister. Such a certificate is valid for a maximum period of three years.

DIVISION II

RESEARCH PROJECT CERTIFICATE

7.3. The Minister may not issue a research project certificate in respect of a research project provided for in a partnership agreement unless an application to that effect is filed with the Minister before the beginning of the project.

Despite the first paragraph, the Minister may issue a research project certificate to a person or a partnership in respect of a research project carried out within the scope of a partnership agreement to which the person or partnership is a party if

(1) the application for the certificate is filed with the Minister on or before the 90th day following the day on which the research project began; or

(2) the application for the certificate is filed with the Minister within three years following the day on which the research project began and

(a) the application could not be filed within the time provided in subparagraph 1 for reasons beyond the control of the person or of the members of the partnership,

(b) the application gives the reasons why it could not be filed within such time, and

7.4. A research project certificate issued to a person or a partnership certifies that the research project referred to in it is a pre-competitive research project carried out under a partnership agreement to which the person or partnership is a party. The certificate also specifies the date on which its period of validity ends.

7.5. In order for a research project to be considered to be a pre-competitive research project carried out under a partnership agreement to which the person or partnership filing the application for a certificate is a party, the following conditions must be met:

(1) each party to the partnership agreement (in this section referred to as a “partner”) has a scientific and technological interest in seeing the research project carried out, and the purpose of the partnership agreement coincides with the respective interests of all the partners, even if their sectors of activity differ;

(2) the partners are on an equal footing and share responsibility for the research project, each partner assuming its own liability, without guaranteeing the liability of the other partners;

(3) the partners pool their contributions to the research project, which contributions may be inputs of equipment, efforts, cash, knowledge or expertise;

(4) the expected duration and the purpose of the research project are defined in the partnership agreement;

(5) the research project affords each partner the possibility of using the results, such that each partner has an interest in seeing the project carried out in order to benefit from the results with a view to enhancing its growth;

(6) the research project will affect the partners, whether the project is successful or not;

(7) each partner is entitled to benefit from the research project results, the planned sharing of those results being based on the interests of each partner and having to be coherent with the pursuit of its technological development; in that respect, the partnership agreement must include the obligation to negotiate conditions relating to the rights of each of the partners to exploit the intellectual property deriving from the research project, and must govern the disclosure of information on the obtention of a patent protecting the intellectual property, if applicable;

(8) all the partners participate in managing the research project and no partner is subordinate to another; and

(9) each partner performs a part of the work required to carry out the research project, while participating in the overall research project.

For the purpose of determining whether the condition of subparagraph 8 of the first paragraph is met, the establishment of a management committee and the development of a decision-making or dispute settlement mechanism, which may be provided for in the partnership agreement, are indicators that the research project is managed jointly.

For the purposes of subparagraph 9 of the first paragraph, groups of researchers, developers or engineers are considered to participate in the overall research project if they separately carry out work related to various aspects of the research project and participate in study sessions and discussions to integrate their respective research results in the overall structure of the project.

CHAPTER VIII

SECTORAL PARAMETERS OF DESIGN TAX CREDIT

DIVISION I

INTERPRETATION AND GENERAL

8.1. In this chapter, unless the context indicates otherwise,

“design tax credit” means the fiscal measure provided for in Division II.6.2 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a corporation is deemed to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year;

“qualified outside consultant” means a person or partnership who holds an unrevoked certificate of qualification referred to in subparagraph 1 of the second paragraph of section 8.2 issued by the Minister.

8.2. To benefit from the design tax credit, a corporation or, if it claims the tax credit as a member of a partnership, the partnership must obtain a certificate in respect of a design activity (in this chapter referred to as an “activity certificate”) from the Minister. Such a certificate must be obtained, as applicable, for each taxation year in which the corporation intends to claim the tax credit, or for each fiscal period of the partnership that ends in such a taxation year.

In addition, depending on the provision of the design tax credit that the corporation intends to benefit from, a corporation must get a copy of one or more of the following certificates from the persons or partnerships concerned:

(1) the certificate of qualification as a qualified outside consultant (in this chapter referred to as a “consultant certificate”) obtained from the Minister by a person or partnership who entered into a contract as a qualified outside consultant with the corporation or the partnership of which the corporation is a member;

(2) the certificate of qualification as a qualified designer (in this chapter referred to as a “designer certificate”) obtained from the Minister by an individual who works as a qualified designer for the corporation or the partnership of which the corporation is a member; and

(3) the certificate of qualification as a qualified patternmaker (in this chapter referred to as a “patternmaker certificate”) obtained from the Minister by an individual who works as a qualified patternmaker for the corporation or the partnership of which the corporation is a member.

DIVISION II

ACTIVITY CERTIFICATE

8.3. An activity certificate issued to a corporation or a partnership for a taxation year or a fiscal period, as applicable, certifies that a design activity relating to a business carried on by the corporation or partnership in Québec was carried out by the corporation or partnership in the year or the fiscal period or, on its behalf, by a qualified outside consultant in the year or a preceding taxation year or in the fiscal period or a preceding fiscal period.

8.4. An activity certificate may be issued only for the design of industrially manufactured goods.

8.5. The design of industrially manufactured goods comprises all the creative activities stemming from a systematic and documented approach that consists in determining the formal, functional and symbolic properties of industrially manufactured goods.

It includes pattern drawing activities.

However, it does not include

(1) software or website design;

(2) the design of a good according to characteristics that meet the specific needs of an individual who does not carry on a business and who has ordered such a good;

(3) layout design that consists in combining or adapting previously designed products to integrate them into a specific environment or site; or

(4) subject to the fourth paragraph, graphic design whose objective is to create visual communication objects, whether graphic artwork consisting in a written, figurative or symbolic representation of objects, facts or ideas, graphic artwork applied or printed on product packaging, or on publishing products such as books, publications or promotional documents, or graphic artwork pertaining to signage, business logos, advertising, identification codes, safety warnings, written user or operating instructions and legally required notices such as the place of manufacture.

The graphic design leading to the printing or application of graphic artwork directly on an industrially manufactured good is an industrially manufactured goods design activity to the extent that such graphic artwork enhances the good either aesthetically or in terms of its functionality. Such graphic artwork must be created by a designer, who may make different versions of it. However, it must not be a modification or an adaptation of existing graphic artwork or of an existing motif.

8.6. Pattern drawing consists in designing patterns and producing geometric or technical drawings for the transformation of textiles, leather or fur. It includes the cutting of a pattern into parts for use in cutting the first sample. It also includes the construction of basic templates, the drafting of technical specifications and the grading and adjustment of a prototype.

DIVISION III

CONSULTANT CERTIFICATE

8.7. A consultant certificate certifies that the person or the partnership to whom it is issued is recognized as a qualified outside consultant.

8.8. A person or a partnership may be recognized as a qualified outside consultant if

(1) the person or partnership has an establishment in Québec; and

(2) the person or partnership carries on in Québec, on behalf of a corporation or a partnership, an industrially manufactured goods design activity that relates to a business carried on in Québec by that corporation or partnership.

DIVISION IV

DESIGNER CERTIFICATE

8.9. A designer certificate certifies that the individual to whom it is issued is recognized as a qualified designer.

8.10. To be recognized as a qualified designer, an individual must, in connection with the industrially manufactured goods design activities he or she carries on,

(1) hold a diploma in design issued by an educational institution that is recognized by the Minister of Higher Education, Research, Science and Technology or the Minister of Education, Recreation and Sports or an equivalent diploma; or

(2) have skills that are satisfactory to the Minister.

DIVISION V

PATTERNMAKER CERTIFICATE

8.11. A patternmaker certificate certifies that the individual to whom it is issued is recognized as a qualified patternmaker.

8.12. To be recognized as a qualified patternmaker, an individual must, in connection with the industrially manufactured goods design activities carried on by the individual, have the technical skills necessary to carry out pattern drawing activities in order to give concrete form to the ideas of a designer, and

(1) hold a diploma of vocational studies issued by the Minister of Education, Recreation and Sports or an equivalent diploma; or

(2) have skills that are satisfactory to the Minister.

CHAPTER IX

SECTORAL PARAMETERS OF TAX CREDIT FOR CONSTRUCTION OR CONVERSION OF VESSELS AND TAX HOLIDAY ON CAPITAL IN RESPECT OF CONSTRUCTION OR CONVERSION OF VESSELS

DIVISION I

INTERPRETATION AND GENERAL

9.1. In this chapter, unless the context indicates otherwise,

“construction work” in respect of a vessel means all the work relating to the construction or reconstruction of the vessel that may give rise to a new certificate of registry in the Canadian Register of Vessels, established under section 43 of the Canada Shipping Act, 2001 (S.C. 2001, c. 26), including the assembly of the parts or modules of the vessel that are manufactured by a third party in a place other than that of the assembly, but excluding the manufacture of parts or modules of the vessel by a third party without final assembly;

“conversion work” in respect of a vessel means work that is major on a technical and quantitative level, that involves substantial changes to the superstructures, machinery or equipment, that alters the essential characteristics of the vessel and that meets at least two of the following requirements:

(1) the work requires the replacement or installation of structural elements whose total weight is greater than 15% of the vessel’s total weight before the beginning of the work;

(2) the cost of the work is greater than 20% of the vessel’s market value before the beginning of the work;

(3) the work substantially changes the vocation of the vessel;

“issuance period” in respect of a vessel means the six-year period that begins on the date of coming into force of the first qualification certificate referred to in the first paragraph of section 9.2 that is issued in respect of the vessel;

“tax credit for the construction or conversion of vessels” means the fiscal measure provided for in Division II.6.5 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a corporation is deemed to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year;

“tax holiday on capital in respect of vessels” means the fiscal measure provided for in paragraphs b.2 and b.2.1 of section 1137 and sections 1130, 1137.1, 1137.1.1 and 1137.7 of the Taxation Act, under which a corporation may deduct an amount in computing its paid-up capital for a taxation year;

“vessel” includes a semi-submergible rig stabilized by submerging pontoons and by anchoring, as well as a floating plant if it is intended to remain floating and be registered as a vessel, but does not include a self-elevating platform.

9.2. A corporation must obtain a qualification certificate (in Division II referred to as a “vessel qualification certificate”) from the Minister, in respect of each vessel for which the corporation intends to claim the tax credit for the construction or conversion of vessels. An application for such a qualification certificate must be filed for each period, which does not exceed three years and which is included in the issuance period relating to the vessel, for which the corporation wishes to benefit from the tax credit. If the construction or conversion work in respect of the vessel is carried out under a subcontract, the corporation must also obtain a qualification certificate in respect of the subcontract (in Division II referred to as a “subcontract qualification certificate”) from the Minister.

A corporation must obtain a qualification certificate (in Division III referred to as a “vessel qualification certificate”) from the Minister, in respect of each vessel for which the corporation intends to claim the tax holiday on capital in respect of vessels. Such a qualification certificate is valid for a period that starts at the beginning of the period of construction or conversion of the vessel referred to in the qualification certificate and that ends at the end of the fourth year following the year in which the vessel is delivered. If the construction or conversion work in respect of the vessel is carried out under a subcontract, the corporation must also obtain a qualification certificate in respect of the subcontract (in Division III referred to as a “subcontract qualification certificate”) from the Minister.

In addition, a corporation may obtain a qualification certificate (in Division II referred to as a “pre-eligibility qualification certificate”) from the Minister, in respect of each vessel for which the corporation plans to apply for a qualification certificate referred to in the first paragraph.

The corporation must file an application for a qualification certificate in respect of a vessel that is the subject of a construction or conversion project,

(1) in the case of a qualification certificate referred to in the first paragraph,

(a) after a preliminary agreement has been reached with the client in respect of the project, but before a firm contract has been entered into in that respect, in the case of the first qualification certificate in respect of the vessel;

(b) before the end of the period for which the preceding qualification certificate was obtained, in any other case;

(2) in the case of a qualification certificate referred to in the second paragraph, before the beginning of the construction or conversion work in respect of the vessel; or

(3) in the case of a qualification certificate referred to in the third paragraph, before a preliminary agreement has been reached with the client.

The application for a qualification certificate in respect of a subcontract under which the construction or conversion work in respect of a vessel is carried out must be filed by the corporation at the same time as the application for a qualification certificate in respect of the vessel concerned.

However, the Minister may deliver a qualification certificate referred to in the first paragraph in respect of a vessel for a particular period, other than the first, only if the following conditions are met in respect of the corporation applying for it:

(1) such a qualification certificate in respect of the vessel was issued to the corporation for any preceding period included in its issuance period; and

(2) at the time the qualification certificate is to be issued for the particular period, no certificate referred to in subparagraph 1 has been revoked.

If, at a particular time, the Minister revokes a qualification certificate referred to in the first paragraph issued to the corporation in respect of a vessel for a given period, any such certificate issued to the corporation in respect of the vessel for a particular period subsequent to the given period is deemed to be revoked by the Minister at that time. In such a case, the effective date of the deemed revocation is the date of coming into force of the certificate that is deemed to be revoked.

DIVISION II

QUALIFICATION CERTIFICATES RELATING TO TAX CREDIT FOR CONSTRUCTION OR CONVERSION OF VESSELS

9.3. A vessel qualification certificate issued to a corporation certifies that the vessel to be constructed or converted and referred to in the certificate is recognized as an eligible vessel and that it will be a prototype vessel or the first, second or third vessel of a series of vessels.

9.4. The Minister may issue a vessel qualification certificate to a corporation, in relation to a vessel to be constructed or converted, only if the corporation

(1) has an establishment in Québec that has direct access to a navigable body of water;

(2) has the tools, land, keep blocks, ramps, dry docks, and workshops under permanent shelter that are necessary for the construction or conversion of vessels in whole or in modules;

(3) shows that it has the capacity to launch the vessel;

(4) shows that it has the capacity to construct or convert a vessel and has constructed or converted a vessel or barge of more than 50 gross tonnage in the last five years for a client with whom it is dealing at arm’s length; and

(5) permanently has a number of employees working on a regular basis on naval construction, reconstruction or repair on a hauling ramp or in a dry dock.

9.5. A vessel may be recognized as an eligible vessel if

(1) its gross tonnage is at least 50 tons;

(2) it is intended to be used for the transportation of goods or passengers or for the provision of a specialized service;

(3) it is undergoing construction or conversion work in Québec; and

(4) it may be certified for navigation by Transport Canada.

9.6. A vessel is a prototype vessel if

(1) its essential characteristics are different from those of vessels constructed or converted previously by the corporation, or the construction or conversion work in respect of the vessel requires an investment in innovation in any of the following fields:

(a) planning the work,

(b) production methods and processes, and

(2) (paragraph repealed);

(3) it is the first vessel of a series whose repeat business potential is established, in particular by commitments to order, letters of intent of clients already operating maritime services or a market study showing the construction potential for a series of vessels.

A vessel is the first, second or third vessel of a series if it is constructed or converted in that order after a benchmark prototype vessel and according to the plans and specifications for the construction or conversion of that prototype vessel.

For the purposes of the second paragraph, a prototype vessel is a vessel in respect of which the corporation holds a valid vessel qualification certificate certifying that the vessel is a prototype vessel.

9.7. A subcontract qualification certificate issued to a corporation certifies that the work to be carried out under the subcontract referred to in the certificate requires the use of labour in Québec that represents more than 50% of the cost of the subcontract, and that the work is construction or conversion work in respect of a vessel for which the corporation has obtained a vessel qualification certificate.

9.7.1. A pre-eligibility qualification certificate issued to a corporation certifies that, in respect of the vessel to be constructed or converted and referred to in the certificate, the Minister would issue a vessel qualification certificate to the corporation if, after reaching a preliminary agreement with a client in respect of a vessel construction or conversion project, as the case may be, the corporation applied for one to the Minister.

9.7.2. The Minister may issue a pre-eligibility qualification certificate to a corporation in respect of a vessel to be constructed or converted only if the corporation shows, to the Minister’s satisfaction, that the conditions of sections 9.4 to 9.6 will be met as of the filing of an application for a first vessel qualification certificate in respect of the vessel.

9.7.3. The Minister is not bound by a pre-eligibility qualification certificate the Minister issued to a corporation in respect of a vessel to be constructed or converted if the Minister ascertains that any of the conditions of sections 9.4 to 9.6 has not been met.

DIVISION III

QUALIFICATION CERTIFICATES RELATING TO TAX HOLIDAY ON CAPITAL IN RESPECT OF VESSELS

9.8. A vessel qualification certificate issued to a corporation certifies that the vessel to be constructed or converted and referred to in the certificate is recognized as an eligible vessel.

9.9. A vessel may be recognized as an eligible vessel if it meets the conditions of section 9.5.

9.10. A subcontract qualification certificate issued to a corporation certifies that the subcontract referred to in the certificate entrusts a person or partnership operating a naval shipyard in Québec with the carrying out in Québec of construction or conversion work in respect of a vessel for which the corporation obtained a vessel qualification certificate.

CHAPTER X

SECTORAL PARAMETERS OF TAX HOLIDAY FOR CORPORATION DEDICATED TO COMMERCIALIZATION OF INTELLECTUAL PROPERTY

DIVISION I

INTERPRETATION AND GENERAL

10.1. In this chapter, unless the context indicates otherwise,

“computer program” has the meaning assigned by section 2 of the Copyright Act (R.S.C. 1985, c. C-42);

“eligible institute” means a person or entity that is an eligible public research centre or an eligible university entity for the purposes of Division II.1 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act;

“issuance period” of a corporation means the period beginning at the time identified by the corporation as the time when it began to operate the business referred to in the first paragraph of section 10.3, and ending on the last day of the 10-year period beginning on the date of its incorporation;

“tax holiday for a corporation dedicated to the commercialization of intellectual property” means the fiscal measure provided for in sections 771, 771.1, 771.1.1, 771.8.5.1, 771.14 and 771.15 of the Taxation Act, which allows a corporation to deduct an amount under subparagraph j.1 of subsection 1 of section 771 of that Act in computing its tax payable for a taxation year under Part I of that Act.

10.2. To benefit from the tax holiday for a corporation dedicated to the commercialization of intellectual property, a corporation must obtain from the Minister a certificate in respect of its business (in this chapter referred to as a “business certificate”). An application for such a certificate must be filed for each period, not exceeding three years, for which the corporation intends to benefit from the tax holiday or would intend to do so if it had tax payable under Part I of the Taxation Act for a taxation year included in whole or in part in the period.

However, the Minister may deliver a business certificate for a particular period, other than the first, only if the following conditions are met in respect of the corporation applying for it:

(1) a business certificate was issued to the corporation for any preceding period included in its issuance period; and

(2) at the time the business certificate is to be issued for the particular period, no certificate referred to in subparagraph 1 has been revoked.

If, at a particular time, the Minister revokes a business certificate issued to the corporation for a given period, any business certificate issued to the corporation for a particular period subsequent to the given period is deemed to be revoked by Investissement Québec at that time. In such a case, the effective date of the deemed revocation is the date of coming into force of the certificate that is deemed to be revoked.

DIVISION II

BUSINESS CERTIFICATE

10.3. A business certificate issued to a corporation certifies that the business that the corporation declares it is carrying on is recognized as an eligible commercialization business for the period specified in the certificate.

In the case of the first business certificate, its date of coming into force is the date identified by the corporation as the date on which it began to carry on the business concerned.

The period for which the Minister issues a business certificate may not exceed three years and must be within the corporation’s issuance period.

10.4. A business may be recognized as an eligible commercialization business if the Minister is of the opinion that its sole purpose is

(1) the manufacturing and selling of goods more than 50% of whose value is derived from an eligible intellectual property;

(2) the manufacturing and selling of goods of which an essential component is an eligible intellectual property; or

(3) the licensing of computer programs each of which is an eligible intellectual property.

10.5. A property is considered to be an eligible intellectual property if

(1) the property was developed by one or more individuals each of whom is either an inventor for the purposes of the Patent Act (R.S.C. 1985, c. P-4) or an author for the purposes of the Copyright Act, in the course of employment with or academic study at an eligible institute, and its development did not result from a research contract carried out on behalf of a person or entity other than the institute;

(2) no person or partnership owned the property, in any manner whatever, other than

(a) the eligible institute where the research work for its development took place,

(b) an individual referred to in paragraph 1,

(d) a subsidiary of an eligible institute, or an entity controlled by such an institute, that is recognized by the Minister;

(3) where the eligible institute referred to in subparagraph a of paragraph 2 has an official policy on disclosure of intellectual property, the property was disclosed to the institute in a timely manner and within the deadline required in accordance with the policy; and

(4) the property is a property in respect of which a patent has been issued under the Patent Act, a property in respect of which an application for a patent was filed under that Act by a person or entity referred to in any of subparagraphs a to d of paragraph 2, provided the patent may reasonably be expected to be issued in accordance with the application no later than the last day of the issuance period of the corporation referred to in the first paragraph of section 10.2, or a copyrighted computer program which the Minister considers to be a significant technological advance at the time it is completed.

CHAPTER XI

SECTORAL PARAMETERS OF THE TAX EXEMPTION RELATING TO A TAX-FREE RESERVE OF A QUALIFIED SHIPOWNER

DIVISION I

INTERPRETATION AND GENERAL

11.1. In this chapter, unless the context indicates otherwise,

“qualified shipowner” means a corporation that has declared to the Minister that it is a qualified shipowner within the meaning of section 979.24 of the Taxation Act;

“qualified shipyard” means a shipyard operated in Québec by a corporation and that meets the conditions set out in paragraphs 1 to 3 and 5 of section 9.4 of this Schedule;

“qualified vessel” has the meaning assigned by section 979.24 of the Taxation Act;

“tax exemption relating to a tax-free reserve of a qualified shipowner” means the fiscal measure provided for in section 726.4.0.2 of the Taxation Act and in Title X of Book VII of Part I of that Act under which a corporation may benefit from a tax exemption for a taxation year in aspect of income earned within a reserve.

11.2. To benefit from the tax exemption relating to a tax-free reserve of a qualified shipowner, a corporation is required to obtain a qualification certificate from the Minister.

The Minister may issue a qualification certificate to a corporation only if the corporation has filed an application with the Minister for that purpose before 11 March 2020.

DIVISION II

QUALIFICATION CERTIFICATE

11.3. The qualification certificate issued to a qualified shipowner certifies that the shipowner, in carrying on its business, operates one or more qualified vessels and intends to set up a contingency fund with a view to having work carried out by a corporation that operates a qualified shipyard, in that shipyard, to maintain or renovate qualified vessels in the shipowner’s fleet or to qualified vessel built.

CHAPTER XII

SECTORAL PARAMETERS OF TAX CREDIT FOR RESEARCH CARRIED ON BY PUBLIC RESEARCH CENTRE

DIVISION I

INTERPRETATION AND GENERAL

12.1. In this chapter, unless the context indicates otherwise,

“public research centre” means a government research centre or any other body undertaking scientific research and experimental development;

“tax credit for research carried on by a public research centre” means the fiscal measure provided for in Division II.1 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a person is deemed to have paid an amount to the Minister of Revenue on account of the person’s tax payable under that Part for a taxation year.

12.2. In order for a person to benefit from the tax credit for research carried on by a public research centre, a public research centre must be recognized by the Minister as an eligible public research centre.

DIVISION II

RECOGNITION AS ELIGIBLE PUBLIC RESEARCH CENTRE

12.3. To be recognized as an eligible public research centre, a public research centre must file with the Minister a written application containing all the information showing that the centre meets the conditions of subparagraphs 1 to 5 of the first paragraph of section 12.4. For the purposes of this Act, the application is considered to be an application for a certificate.

12.4. The Minister recognizes a public research centre as an eligible public research centre if the Minister considers that

(1) the centre has expertise in a specific field;

(2) the centre has employees with the qualifications necessary to carry out scientific research and experimental development work that may be subcontracted to it;

(3) the centre has the premises and equipment needed to carry out the work;

(4) the centre receives public funds in relation to carrying out the work; and

(5) the results of the work are generally available to the public.

A public research centre that, on 30 June 2016, was an eligible public research centre described in paragraph a.1 of section 1029.8.1 of the Taxation Act (chapter I-3), as that paragraph read on that date, is deemed to be, on 1 July 2016, a public research centre that is recognized in accordance with the first paragraph.

12.5. The name of a public research centre recognized as an eligible public research centre and the date of coming into force of the recognition are entered on the list of eligible public research centres published by the Minister, in the manner determined by the Minister. For the purposes of this Act, the entry is deemed to be a certificate issued to the public research centre by the Minister whose date of coming into force is the date of coming into force of the recognition.

12.6. An eligible public research centre must, on or before the last day of February of a particular calendar year, file a written statement with the Minister confirming that, throughout the preceding year, the conditions of subparagraphs 1 to 5 of the first paragraph of section 12.4 continued to be met in its respect. The centre must also notify the Minister as soon as any change in its human, physical or financial resources that could compromise its capacity to carry out scientific research and experimental development work occurs.

The failure of an eligible public research centre to file the annual statement or notice of change may entail the cancellation of its recognition by the Minister.

12.7. If a public research centre’s recognition as an eligible public research centre is cancelled, the cancellation and the effective date of the cancellation are entered on the list of eligible public research centres referred to in section 12.5. For the purposes of this Act, the cancellation is considered to be a revocation by the Minister of the certificate that the Minister is deemed to have issued to the centre under that section. The effective date of the revocation is the effective date of the cancellation.

CHAPTER XIII

SECTORAL PARAMETERS OF TAX CREDIT FOR PRODUCTION OF PYROLYSIS OIL IN QUÉBEC

DIVISION I

INTERPRETATION AND GENERAL RULES

13.1. In this chapter,

“carbon intensity” of a pyrolysis oil means the lifetime greenhouse gas emission of the fuel compared to the energy generated when it is combusted, expressed in grams of carbon dioxide equivalent per megajoule of energy produced;

“higher heating value” of a pyrolysis oil means the amount of heat supplied by the complete combustion of a unit mass of fuel, expressed in megajoules of energy produced per litre;

“pyrolysis oil” means a liquid mixture of oxygenated organic compounds obtained from the condensation of vapours resulting from the thermal decomposition of residual forest biomass;

“residual forest biomass” means forest biomass resulting from harvesting activities or primary or secondary processing activities, including non-contaminated, additive-free wood from deconstruction, where it is not used in a 4R-D-type hierarchical use approach, within the meaning of the Québec residual materials management policy (chapter Q-2, r. 35.1), but excluding standing trees;

“tax credit for the production of pyrolysis oil in Québec” means the fiscal measure provided for in Division II.6.0.9.2 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a corporation is deemed to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year.

13.2. To benefit from the tax credit for the production of pyrolysis oil in Québec in respect of a pyrolysis oil it produces in a taxation year, a corporation must obtain a certificate issued for the year by the Minister in respect of the pyrolysis oil. Such a certificate must be obtained in respect of each pyrolysis oil that has a different carbon intensity or higher heating value.

DIVISION II

CERTIFICATE

13.3. A certificate issued to a corporation certifies that the pyrolysis oil referred to in the certificate is recognized as eligible pyrolysis oil for the taxation year for which the application for the certificate is made. The certificate certifies the carbon intensity and the higher heating value of the pyrolysis oil for the taxation year.

13.4. To obtain a certificate in respect of a pyrolysis oil it produces in a taxation year, a corporation must calculate the carbon intensity and determine the higher heating value of the pyrolysis oil. The calculation and the determination are based on the pyrolysis oil produced in the calendar year that ended in the taxation year.

The carbon intensity is calculated and the higher heating value is determined using the GHGenius tool, version 4.03c, and, in the case of calculating the carbon intensity, done so in accordance with the terms and conditions provided for in Division III of the Ministerial Order concerning the measurement methods and tools for the purposes of the Regulation respecting the integration of low-carbon-intensity fuel content into gasoline and diesel fuel (chapter P-30.01, r. 0.2).

The corporation must submit its calculation of the carbon intensity and the higher heating value it determines to the Minister.

If unable to calculate the carbon intensity or determine the higher heating value of the pyrolysis oil in the manner described in the second paragraph, the corporation may use another method for calculating the carbon intensity or determining the higher heating value. That other method must first be approved by the Minister.

Where the corporation did not produce the pyrolysis oil in the calendar year that ended in the taxation year or where no calendar year ended in the taxation year, the carbon intensity of the pyrolysis oil is calculated, and the higher heating value of the pyrolysis oil is determined, for the taxation year.

CHAPTER XIV

SECTORAL PARAMETERS OF TAX CREDIT FOR PRODUCTION OF BIOFUEL IN QUÉBEC

DIVISION I

INTERPRETATION AND GENERAL RULES

14.1. In this chapter,

“biofuel” means a low-carbon-intensity fuel that is a liquid fuel at a temperature of 15.6 degrees Celsius and a pressure of 101.325 kilopascals, that is produced from eligible materials and that may be blended with gasoline or diesel fuel;

“carbon intensity” of a biofuel means the lifetime greenhouse gas emission of the fuel compared to the energy generated when it is combusted, expressed in grams of carbon dioxide equivalent per megajoule of energy produced;

“eligible materials” means the following materials, except material from an oil palm:

(a) an organic material;

(b) residual materials, within the meaning assigned by section 1 of the Environment Quality Act (chapter Q-2);

(d) a combination of the materials listed in paragraphs a to c;

“higher heating value” of a biofuel means the amount of heat supplied by the complete combustion of a unit mass of fuel, expressed in megajoules of energy produced per litre;

“tax credit for the production of biofuel in Québec” means the fiscal measure provided for in Division II.6.0.9.3 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, under which a corporation is deemed to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year.

14.2. To benefit from the tax credit for the production of biofuel in Québec in respect of a biofuel it produces in a taxation year, a corporation must obtain a certificate issued for the year by the Minister in respect of the biofuel. Such a certificate must be obtained in respect of each biofuel that has a different carbon intensity or higher heating value.

DIVISION II

CERTIFICATE

14.3. A certificate issued to a corporation certifies that the biofuel referred to in the certificate is recognized as eligible biofuel for the taxation year for which the application for the certificate is made. The certificate certifies the carbon intensity and the higher heating value of the biofuel for the taxation year. It also identifies which fuel, between gas and diesel fuel, is replaced by the biofuel.

14.4. To obtain a certificate in respect of a biofuel it produces in a taxation year, a corporation must calculate the carbon intensity and determine the higher heating value of the biofuel. The calculation and the determination are based on the biofuel produced in the calendar year that ended in the taxation year.

The corporation must submit its calculation of the carbon intensity and the higher heating value it determines to the Minister.

If unable to calculate the carbon intensity or determine the higher heating value of the biofuel in the manner described in the second paragraph, the corporation may use another method for calculating the carbon intensity or determining the higher heating value. That other method must first be approved by the Minister.

Where the corporation did not produce the biofuel in the calendar year that ended in the taxation year or where no calendar year ended in the taxation year, the carbon intensity of the biofuel is calculated, and the higher heating value of the biofuel is determined, for the taxation year.

2012, c. 1, Schedule C; 2013, c. 10, ss. 187 to 196; 2013, c. 28, ss. 172 to 174; 2015, c. 21, ss. 560 to 566; 2017, c. 1, ss. 402 and 403; 2019, c. 29, ss. 99 to 102; 2021, c. 142021, c. 14, s. 2071; 2021, c. 362021, c. 36, s. 167; 2023, c. 2, ss. 72 and 73.

2021-12-10 Show full text at this date

SCHEDULE C

MINISTER OF ECONOMY AND INNOVATION

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. The Minister of Economy and Innovation administers the sectoral parameters of the following fiscal measures:

(1) the deferral of the taxation of a qualified patronage dividend provided for in sections 726.27 to 726.29 of the Taxation Act (chapter I-3);

(1.1) the deduction in respect of a foreign researcher provided for in sections 737.19 to 737.22 of the Taxation Act;

(1.2) the deduction in respect of foreign experts provided for in sections 737.22.0.0.5 to 737.22.0.0.8 of the Taxation Act;

(2) (paragraph repealed);

(3) (paragraph repealed);

(4) the deduction in respect of the second cooperative investment plan provided for in sections 726.4 and 965.39.1 to 965.39.7 of the Taxation Act;

(4.2) the tax credit for private partnership pre-competitive research provided for in sections 1029.8.16.1.1 to 1029.8.16.1.9 of the Taxation Act;

(5) (paragraph repealed);

(6) (paragraph repealed);

(7) the design tax credit provided for in sections 1029.8.36.4 to 1029.8.36.28 of the Taxation Act;

(9) the tax holiday for a corporation dedicated to the commercialization of intellectual property provided for in sections 771, 771.1, 771.1.1, 771.8.5.1, 771.14 and 771.15 of the Taxation Act;

(10) the tax exemption in relation to a tax-free reserve of a qualified shipowner provided for in section 726.4.0.2 of the Taxation Act and in Title X of Book VII of Part I of that Act; and

(11) the tax credit for university research and for research carried on by a public research centre or a research consortium provided for in sections 1029.8.1 to 1029.8.7 of the Taxation Act.