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

À jour au 4 juin 2021

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chapter P-5.1

Act respecting the sectoral parameters of certain fiscal measures

CHAPTER I PURPOSE AND JURISDICTION

1. This Act governs the issue, amendment and revocation of certificates, qualification certificates and other documents that are necessary for the purposes of certain fiscal measures. It establishes the general rules that apply to the decisions to issue, amend or revoke those documents and sets out, in each of its schedules, the special rules and sectoral parameters that apply to the fiscal measures referred to in this Act.

2012, c. 1, s. 1.

2. The sectoral parameters set out in the schedules to this Act are administered by

(1)  Investissement Québec, as regards Schedule A;

(2)  (paragraph repealed);

(3)  the Minister of Economy and Innovation, as regards Schedule C;

(4)  the Minister of Higher Education, Research, Science and Technology, as regards Schedule D;

(5)  the Minister of Finance, as regards Schedule E;

(6)  (paragraph repealed);

(7)  the Minister of Transport, as regards Schedule G;

(8)  the Société de développement des entreprises culturelles, as regards Schedule H; and

(9)  the Minister of Culture and Communications, as regards Schedule I.

2012, c. 1, s. 2; 2013, c. 28, s. 171; 2015, c. 21, s. 540; 2019, c. 29, s. 98; 2021, c. 18, s. 163.

CHAPTER II INTERPRETATION AND GENERAL

3. Unless the context indicates otherwise, any reference to a minister or body in this Act and its regulations is a reference to the ministers and bodies listed in section 2, while a reference to a responsible minister or body is a reference to the minister or body entrusted with the administration of the sectoral parameters set out in a schedule.

2012, c. 1, s. 3.

4. In this Act and its regulations, unless the context indicates otherwise,

“agreed proportion” has the meaning assigned by section 1.8 of the Taxation Act (chapter I-3);

“business” means a business within the meaning of section 1 of the Taxation Act, or a part of such a business;

“employee” has the meaning assigned by section 1 of the Taxation Act;

“filing-due date” applicable to a person for a taxation year has the meaning assigned by section 1 of the Taxation Act;

“fiscal law” means a fiscal law within the meaning of the Tax Administration Act (chapter A-6.002);

“fiscal measure” means a provision or a set of provisions of a fiscal law that allows a person to benefit from a deduction in computing income, taxable income, tax payable or paid-up capital, an exemption from or a reduction of an assessment, an amount deemed to have been paid on account of tax payable, a reduction of the tax on capital payable, or any other similar benefit, that is referred to in section 1.1 of a schedule, including incidental provisions that aim to recover, in whole or in part, the tax benefit so granted;

“fiscal period” has the meaning assigned by Part I of the Taxation Act;

“individual” has the meaning assigned by section 1 of the Taxation Act;

“person” has the meaning assigned by section 1 of the Taxation Act;

“prescribed” means, in the case of a form or information to be provided in a form, prescribed by the responsible minister or by the responsible minister’s deputy minister, or prescribed by the responsible body, and, in any other case, prescribed by regulation or determined in accordance with rules prescribed by regulation;

“property” has the meaning assigned by section 1 of the Taxation Act;

“subsidiary controlled corporation” has the meaning assigned by section 1 of the Taxation Act;

“subsidiary wholly-owned corporation” has the meaning assigned by section 1 of the Taxation Act;

“taxation year” has the meaning assigned by Part I of the Taxation Act.

2012, c. 1, s. 4; 2015, c. 36, s. 172.

5. In this Act and its regulations, unless otherwise provided,

(1)  a legal person, whether or not established for pecuniary gain, is designated by the word “corporation” ;

(2)  a person is considered to be a person resident in Québec or Canada if the person is so considered for the purposes of the Taxation Act (chapter I-3), and is considered to be a person not resident in Québec or Canada in any other case;

(3)  a person or a partnership is considered not to be dealing at arm’s length with another person or partnership if the person or partnership is so considered for the purposes of Part I of the Taxation Act, and is considered to be a person or partnership dealing at arm’s length with the other person or partnership in any other case;

(4)  a person is considered to be related to another person if the person is so considered for the purposes of Part I of the Taxation Act, and is considered not to be so related in any other case;

(5)  a corporation is considered to be associated with another corporation in a taxation year if the corporation is so considered for the purposes of Part I of the Taxation Act, and is considered not to be so associated in any other case;

(6)  a corporation is considered to be controlled, directly or indirectly in any manner whatever, by a person or a group of persons if the corporation is so considered for the purposes of Part I of the Taxation Act, and is considered not to be so controlled in any other case;

(7)  a reference to a taxation year ending in another year includes a reference to a taxation year the end of which coincides with the end of the other year;

(8)  a reference to a fiscal period ending in a taxation year includes a reference to a fiscal period the end of which coincides with the end of the taxation year; and

(9)  a reference to a region and a reference to an urban agglomeration mean the corresponding administrative region described in the Décret concernant la révision des limites des régions administratives du Québec (chapter D-11, r. 1) and the corresponding urban agglomeration described in Title II of the Act respecting the exercise of certain municipal powers in certain urban agglomerations (chapter E-20.001), respectively.

2012, c. 1, s. 5; 2017, c. 1, s. 392.

5.1. In applying the rules of paragraphs 3 to 6 of section 5, section 1029.6.0.1.7 of the Taxation Act (chapter I-3) must be taken into account.

2015, c. 36, s. 173.

6. If a fiscal measure requires that a certificate, qualification certificate or other document be issued in respect of a property, activity, business, person or partnership, each portion of the document, issued under this Act, that attests to or certifies the existence of a fact, of a state or of elements of qualification in respect of the property, activity, business, person or partnership is deemed, for the purposes of this Act, its regulations and the fiscal measure, to be a separate document.

2012, c. 1, s. 6.

7. For greater certainty, the issue, under this Act, of a document in respect of an individual attesting or certifying that the individual is recognized as an eligible employee, a specified employee or any other type of employee is not binding on the Minister of Revenue with respect to the individual’s employee status for the purposes of a fiscal law.

2012, c. 1, s. 7.

CHAPTER III CERTIFICATES, QUALIFICATION CERTIFICATES AND OTHER DOCUMENTS

DIVISION I APPLICATION FOR ISSUE OF DOCUMENT

8. Any application for a certificate, qualification certificate or other document that is necessary for the purposes of a fiscal measure must, as provided for in the relevant provision of a schedule to this Act, be filed with the responsible minister or body

(1)  by the person who wishes to benefit from the fiscal measure or, if such a person wishes to do so as a member of a partnership, by the partnership;

(2)  by a person or a partnership in respect of an individual who works for the person or partnership, to enable that individual to benefit from the fiscal measure; or

(3)  by any other person or partnership to enable a third party to benefit from the fiscal measure.

2012, c. 1, s. 8.

9. The application must be made in the prescribed form, contain prescribed information and be filed with the required documents. It must also contain any other information or document required by the applicable schedule to this Act and comply with any other special requirement provided for in that schedule.

2012, c. 1, s. 9.

9.1. Subject to a special provision of the applicable schedule, where a fiscal measure consists in allowing a person to benefit from a deduction in computing tax payable under section 776.1.28 of the Taxation Act (chapter I-3) or from an amount deemed to have been paid on account of tax payable for a particular taxation year, the application must be filed with the responsible minister or body at or before the end of the nine-month period that begins,

(1)  where the person avails himself, herself or itself of the fiscal measure as a member of a partnership, on the day that follows the date of the end of the partnership’s fiscal period that ends in the particular taxation year; or

(2)  in any other case, on the day that follows the person’s filing-due date for the particular taxation year.

The responsible minister or body may, on reasonable grounds, relieve a person or a partnership from failure to comply with the time limit provided for in the first paragraph if the application has been filed with the minister or body within three months of the expiry of that time limit.

2015, c. 36, s. 174; 2017, c. 1, s. 393.

10. The responsible minister or body may accept an application that is incomplete if only a few details are missing and such omissions are not likely to prevent or significantly delay the examination of the application. Otherwise, the responsible minister or body must return the application to the applicant as soon as possible, specifying which forms, information or documents are missing.

2012, c. 1, s. 10.

DIVISION II ISSUE OF DOCUMENT

11. The responsible minister or body must examine with dispatch every application filed for the issue of a certificate, qualification certificate or other document. For such purpose, the responsible minister or body may contact the applicant to request any additional information or document or take any other action the responsible minister or body considers relevant.

However, should a fee determined under Chapter VII be payable in respect of such an application, the responsible minister or body is not required to examine the application unless the fee has been duly paid by the applicant.

2012, c. 1, s. 11.

12. The responsible minister or body, if of the opinion that all the conditions for the issue of a document are met, issues the document to the applicant. However, the content of the document may differ from what is applied for if an assessment of the applicable facts and parameters so warrants.

If the application is denied, or if the content of the issued document differs from what was applied for, the responsible minister or body must notify the applicant of the decision in writing, giving the reasons on which it is based, and inform the applicant of the right to apply for a review of the decision within the time specified in section 23. If the application was made in respect of an individual described in paragraph 2 of section 8, the responsible minister or body must also, except for the purposes of Chapter III of Schedule E, send the individual a copy of the notice.

2012, c. 1, s. 12.

13. The period of validity of a document issued under this Act is indeterminate, unless the applicable schedule specifies the period for which it is issued.

2012, c. 1, s. 13.

14. Every document issued under this Act must state, in addition to the information required by the applicable schedule, the date of its coming into force, which date may precede the date of its issue. The document must also state, if it is issued for a specified period, its period of validity.

2012, c. 1, s. 14.

CHAPTER IV AMENDMENT AND REVOCATION OF A DOCUMENT

15. The responsible minister or body may amend or revoke a certificate, qualification certificate or other document that has been issued for the purposes of a fiscal measure whose sectoral parameters are under their administration, if information or documents brought to their attention so warrant.

A person or a partnership to whom such a document has been issued is required, on pain of revocation of the document, to inform the responsible minister or body of any change that may entail in the amendment or revocation of the document.

In addition to any grounds set out in a provision of a schedule to this Act, the responsible minister or body is justified in revoking such a document if

(1)  a condition for the issue of the document is no longer complied with; or

(2)  the person or partnership to whom the document was issued made a false statement or omitted material information in the application for the issue of the document or in any other document filed in support of the application, and

(a)  it may reasonably be considered that the document would not have been issued had it not been for the false statement or omission, or

(b)  the person or partnership made the false statement or omitted the material information knowingly or under circumstances amounting to gross negligence.

2012, c. 1, s. 15.

16. Before amending or revoking a document, the responsible minister or body must send a written notice of intention to the person or partnership to whom the document was issued, stating the grounds on which the intended action is based. The responsible minister or body must give the person or partnership 30 days as of the date of the notice to make representations and, if need be, to file any relevant document.

2012, c. 1, s. 16.

17. After the expiry of the time provided for in section 16, the responsible minister or body must, with dispatch, communicate the decision in writing to the person or partnership.

If the decision is to amend or revoke the document, the responsible minister or body must attach the reasons for the decision to the new document referred to in section 18 or to the notice of revocation referred to in section 19 and notify the person or partnership in writing of the right to apply for a review of the decision within the time specified in section 23.

2012, c. 1, s. 17.

18. To amend a document that was issued to a person or a partnership, the responsible minister or body replaces it with a new document with the same date of coming into force.

If the amendment applies only in respect of a part of the period of validity of the document, the new document must reflect that fact by describing both the situation prevailing before the amendment and the new situation.

The new document must be sent to the person or partnership.

2012, c. 1, s. 18.

19. To revoke a document, the responsible minister or body sends a notice of revocation to the person or partnership to whom the document was issued.

2012, c. 1, s. 19.

20. The revocation of a document becomes effective on the date specified by the responsible minister or body in the notice of revocation.

Unless otherwise provided by a special provision of the applicable schedule to this Act, the effective date of the revocation, which may precede the date of the notice of revocation, is

(1)  the earliest date as of which a condition for the issue of the document is no longer met, if the document is revoked on the ground set out in subparagraph 1 of the third paragraph of section 15;

(2)  the date of coming into force of the document, if the document is revoked on the ground set out in subparagraph 2 of the third paragraph of section 15 and the condition of subparagraph a of that subparagraph 2 is met; and

(3)  the date determined by the responsible minister or body, in any other case.

2012, c. 1, s. 20.

21. If a document has been issued to a person or a partnership in respect of an individual described in paragraph 2 of section 8, the responsible minister or body must send the individual a copy of any notice or document sent to the person or partnership in accordance with this chapter.

In the case of a notice of intention provided for in section 16, the responsible minister or body must also give the individual 30 days as of the date of the notice to make representations and, if need be, to file any relevant document.

The second paragraph does not apply in respect of an individual to whom Chapter III of Schedule E applies. The same is true of the first paragraph except in the case of a new document issued under section 18 or a notice of revocation issued under section 19.

2012, c. 1, s. 21.

CHAPTER V REVIEW

22. On the initiative of an interested person, an application may be made to the responsible minister or body for the review of any decision rendered under Chapter III or IV denying an application for a certificate, qualification certificate or other document or amending or revoking such a document. The same applies to a decision to issue a document whose content differs from what is applied for.

However, should a fee determined under Chapter VII be payable in respect of the application for review, the application is not admissible unless the fee has been duly paid by the interested person.

2012, c. 1, s. 22.

23. The application for review must be filed in writing within 60 days of the notification of the contested decision or the issue of the document whose content differs from what was applied for. The application for review must set out the grounds on which it is based.

However, the responsible minister or body may consider an application for review that was filed after the expiry of the time specified in the first paragraph for reasons the responsible minister or body deems reasonable in the circumstances.

2012, c. 1, s. 23.

24. The responsible minister or body must process the application for review with dispatch, and may maintain, quash or amend the contested decision. Before rendering a decision, the responsible minister or body must give interested parties an opportunity to make representations or file any relevant document.

2012, c. 1, s. 24.

25. The responsible minister or body communicates the review decision in writing, including reasons, to interested parties.

2012, c. 1, s. 25.

26. For the purposes of this chapter, the person or partnership who applied for the issue of a document and, if the application for review is filed in respect of an individual described in paragraph 2 of section 8, the individual, except for the purposes of Chapter III of Schedule E, are interested parties.

2012, c. 1, s. 26.

CHAPTER VI INSPECTION AND INQUIRY

27. The responsible minister or body, or a person designated by the responsible minister or body, may, for the purposes of this Act,

(1)  require any information or document, examine any document and make a copy of it;

(2)  require that such information or a copy of such a document be sent, including by fax machine, via telematics or on a computer medium; and

(3)  for the purpose of applying Chapter IV, have access, at any reasonable time, to any establishment where the responsible minister or body, or the person designated by the responsible minister or body, has reasonable cause to believe that information necessary for the inspection is kept.

A copy of a document certified by the responsible minister or body, or by the person designated by the responsible minister or body, is admissible in evidence and has the same probative force as the original.

2012, c. 1, s. 27.

28. The responsible minister or body, or a person designated by the responsible minister or body, may inquire into any matter relating to the carrying out of this Act.

2012, c. 1, s. 28.

29. When conducting an inspection or inquiry, any person designated by a minister or body must, on request, identify himself or herself and produce a document attesting his or her capacity.

No proceedings may be brought against such a person for an act performed in good faith in the exercise of his or her functions.

2012, c. 1, s. 29.

CHAPTER VII FEES

30. The responsible minister or body may, in a regulation, require, in the cases and subject to the terms and conditions prescribed in the regulation, the payment of a fee for an act performed under this Act by the responsible minister or body.

2012, c. 1, s. 30.

CHAPTER VIII COMMUNICATION OF INFORMATION

31. At the request of the Minister of Finance, the responsible minister or body must communicate to that Minister any information held by the responsible minister or body for the purposes of this Act if such communication is necessary to formulate or evaluate the fiscal policy of the Government or to inform a person or a partnership concerning the application of the fiscal policy in respect of the person or partnership.

The communication of information is carried on despite sections 23 and 24 of the Act respecting Access to documents held by public bodies and the Protection of personal information (chapter A-2.1) and the first paragraph of section 59 of that Act.

2012, c. 1, s. 31.

32. The communication of information to the Minister of Finance for a purpose described in the first paragraph of section 31, carried on in accordance with that section or on the initiative of a responsible minister or body referred to in that first paragraph, need not be the subject of an agreement referred to in sections 68 and 68.1 of the Act respecting Access to documents held by public bodies and the Protection of personal information (chapter A-2.1) or be recorded in the register provided for in section 41.3 of that Act.

2012, c. 1, s. 32.

CHAPTER IX REGULATIONS

33. The Government may make regulations prescribing the measures required to carry out this Act.

2012, c. 1, s. 33.

34. Every regulation made under this Act comes into force on the date of its publication in the Gazette officielle du Québec or on any later date specified in the regulation.

A regulation made under section 33 may also, if it so provides, apply to a period that precedes the date of its publication, but that is not prior to 5 March 2012.

2012, c. 1, s. 34.

CHAPTER X PENAL PROVISIONS

35. Every person who

(1)  provides false or inaccurate information to the responsible minister or body, or to a person designated by either of them to exercise all or part of the powers conferred on them by sections 27 and 28, or

(2)  hinders or attempts to hinder in any way a person acting as required or permitted by this Act,

is guilty of an offence.

2012, c. 1, s. 35.

36. Every person who, by an act or omission, assists another person in committing an offence under section 35 or, by encouragement, advice or consent or by an authorization or an order, induces another person to commit such an offence is guilty of the same offence.

2012, c. 1, s. 36.

37. A person who commits an offence under section 35 is liable to a fine of not less than $2,000 nor more than $25,000.

2012, c. 1, s. 37.

38. Penal proceedings for an offence under paragraph 1 of section 35 are prescribed one year from the date on which the prosecutor became aware of the commission of the offence. However, no proceedings may be instituted for such an offence if more than five years have elapsed from the date of the commission of the offence.

2012, c. 1, s. 38.

CHAPTER XI AMENDING PROVISIONS

ACT RESPECTING INTERNATIONAL FINANCIAL CENTRES

39. (Amendment integrated into c. C-8.3, s. 4).

2012, c. 1, s. 39.

40. (Amendment integrated into c. C-8.3, s. 6).

2012, c. 1, s. 40.

41. (Amendment integrated into c. C-8.3, s. 9).

2012, c. 1, s. 41.

42. (Amendment integrated into c. C-8.3, s. 11).

2012, c. 1, s. 42.

43. (Amendment integrated into c. C-8.3, s. 13).

2012, c. 1, s. 43.

44. (Omitted).

2012, c. 1, s. 44.

45. (Amendment integrated into c. C-8.3, s. 17).

2012, c. 1, s. 45.

46. (Omitted).

2012, c. 1, s. 46.

47. (Omitted).

2012, c. 1, s. 47.

48. (Amendment integrated into c. C-8.3, s. 30.1).

2012, c. 1, s. 48.

49. (Amendment integrated into c. C-8.3, s. 31).

2012, c. 1, s. 49.

50. (Amendment integrated into c. C-8.3, s. 36).

2012, c. 1, s. 50.

51. (Amendment integrated into c. C-8.3, s. 39).

2012, c. 1, s. 51.

52. (Amendment integrated into c. C-8.3, s. 51).

2012, c. 1, s. 52.

53. (Amendment integrated into c. C-8.3, s. 63).

2012, c. 1, s. 53.

54. (Amendment integrated into c. C-8.3, s. 64).

2012, c. 1, s. 54.

55. (Amendment integrated into c. C-8.3, s. 65.1).

2012, c. 1, s. 55.

56. (Amendment integrated into c. C-8.3, s. 66).

2012, c. 1, s. 56.

57. (Amendment integrated into c. C-8.3, s. 69.2).

2012, c. 1, s. 57.

58. (Amendment integrated into c. C-8.3, s. 69.3).

2012, c. 1, s. 58.

59. (Amendment integrated into c. C-8.3, s. 104).

2012, c. 1, s. 59.

CINEMA ACT

60. (Amendment integrated into c. C-18.1, s. 168).

2012, c. 1, s. 60.

TAXATION ACT

61. (Amendment integrated into c. I-3, s. 737.20).

2012, c. 1, s. 61.

62. (Amendment integrated into c. I-3, s. 737.27).

2012, c. 1, s. 62.

63. (Amendment integrated into c. I-3, s. 1029.8.36.59.32).

2012, c. 1, s. 63.

64. (Amendment integrated into c. I-3, s. 1049.0.3).

2012, c. 1, s. 64.

65. (Amendment integrated into c. I-3, s. 1049.0.5.1).

2012, c. 1, s. 65.

66. (Amendment integrated into c. I-3, s. 1049.13.1).

2012, c. 1, s. 66.

67. (Amendment integrated into c. I-3, s. 1129.12.8).

2012, c. 1, s. 67.

68. (Amendment integrated into c. I-3, s. 1129.12.12).

2012, c. 1, s. 68.

ACT RESPECTING INVESTISSEMENT QUÉBEC

69. (Amendment integrated into c. I-16.0.1, s. 21).

2012, c. 1, s. 69.

COOPERATIVE INVESTMENT PLAN ACT

70. (Amendment integrated into c. R-8.1.1, s. 2).

2012, c. 1, s. 70.

71. (Amendment integrated into c. R-8.1.1, s. 3).

2012, c. 1, s. 71.

72. (Amendment integrated into c. R-8.1.1, s. 4).

2012, c. 1, s. 72.

73. (Omitted).

2012, c. 1, s. 73.

74. (Amendment integrated into c. R-8.1.1, s. 23).

2012, c. 1, s. 74.

75. (Amendment integrated into c. R-8.1.1, s. 24).

2012, c. 1, s. 75.

76. (Amendment integrated into c. R-8.1.1, s. 29).

2012, c. 1, s. 76.

ACT RESPECTING THE SOCIÉTÉ DE DÉVELOPPEMENT DES ENTREPRISES CULTURELLES

77. (Omitted).

2012, c. 1, s. 77.

CHAPTER XII MISCELLANEOUS, TRANSITIONAL AND FINAL PROVISIONS

DIVISION I VALIDATION OF ACTS PERFORMED BEFORE 5 MARCH 2012

78. Decisions rendered and all other acts performed by a minister or body before 5 March 2012 that concern the issue, amendment or revocation of a certificate, qualification certificate or other document that is necessary for the purposes of a measure referred to in section 79 are validated insofar as those acts were based on standards not provided for by an Act or regulation.

Fees charged in respect of those acts are also validated, insofar as the fees were not authorized by an Act or regulation.

In this section, any reference to a Minister includes a reference to the Minister of Tourism.

2012, c. 1, s. 78.

79. The measures to which sections 78 and 80 refer are those listed in section 1.1 of each of the schedules to this Act as well as the following measures:

(1)  the deduction in respect of a qualified investment fund provided for in Title VII.2.1 of Book IV of Part I of the Taxation Act (chapter I-3);

(2)  the deduction in respect of an independent trader in financial derivatives provided for in Title VII.2.5 of that Book IV;

(3)  the deduction in respect of Québec business investment companies provided for in Title VI.2 of Book VII of that Part I;

(4)  the tax credit for scientific research and experimental development provided for in Division II.3 of Chapter III.1 of Title III of Book IX of that Part I;

(5)  the tax credit for the creation of digital productions provided for in Division II.6.0.0.6 of that Chapter III.1;

(6)  the tax credit for e-business activities provided for in Division II.6.0.1.7 of that Chapter III.1;

(7)  the tax credit for job creation in the optics industry in the Québec area provided for in Division II.6.6.1 of that Chapter III.1;

(8)  the tax credit for job creation in the manufacturing or environmental sector in the Angus Technopole provided for in Division II.6.6.3 of that Chapter III.1;

(9)  the tax credits for the development of the fields of biotechnology and nutraceuticals provided for in Division II.6.6.5 of that Chapter III.1;

(10)  the tax credit for job creation in the Carrefours de l’innovation provided for in Division II.6.6.7 of that Chapter III.1;

(11)  the tax credit for investment fund creation provided for in Division II.6.8 of that Chapter III.1;

(12)  the tax credit relating to fund managers provided for in Division II.6.9 of that Chapter III.1;

(13)  the tax credit for solicitation expenditure in respect of a foreign investment fund provided for in Division II.6.12 of that Chapter III.1;

(14)  the tax credit relating to financial analysts specialized in securities of Québec corporations or in financial derivatives provided for in Division II.6.13 of that Chapter III.1;

(15)  the tax credit relating to communications between corporations and stock market investors provided for in Division II.6.14 of that Chapter III.1;

(16)  the tax credits to foster the participation of securities dealers on the NASDAQ Stock Exchange provided for in Division II.6.14.1 of that Chapter III.1; and

(17)  the capital tax holiday in respect of a property used in the operation of recreational facilities in Québec provided for in paragraphs b.3 and b.4 of section 1137 and sections 1137.2 to 1137.7 of the Taxation Act.

2012, c. 1, s. 79.

DIVISION II TRANSITIONAL PROVISIONS

80. The provisions of Chapters III and IV that concern the issue, amendment or revocation, after 4 March 2012, of a document that is necessary for the purposes of a measure referred to in section 79, in relation either to a date or period that precedes 1 January 2011 or, where the measure is one listed in section 1.1 of Schedule H, to a period having begun before 1 January 2011, and the provisions of Chapter V that concern the review, after 4 March 2012, of a decision in respect of such a document, in relation to such a preceding date or period, apply on the basis of the standards applicable on that date or during that period, despite the fact that those standards are not provided for by an Act or regulation.

For that purpose, any reference to a Minister in Chapters IV and V includes a reference to the Minister of Tourism.

For the purposes of the first paragraph, a reference to standards applicable during a period or on a date is a reference to such standards established by the Minister of Finance and, if applicable, by the minister or body responsible for their application.

2012, c. 1, s. 80.

81. Before 5 March 2012, the first paragraph of section 22 is to be read

(1)  where it applies between 30 March 2010 and 1 January 2011, as if “under Chapter III or IV” was replaced by “under Chapter II or III of Schedule E or under Division III of Chapter III of the Act respecting international financial centres (chapter C-8.3)” ; and

(2)  where it applies between 31 December 2010 and 5 March 2012, without reference to “under Chapter III or IV”.

2012, c. 1, s. 81.

82. Between 30 March 2010 and 5 March 2012, the third paragraph of section 10, the second paragraph of section 12, section 23 and Divisions III and IV of Chapter III of the Act respecting international financial centres (chapter C-8.3), except the second paragraph of each of sections 26 and 29, apply in respect of Chapters II and III of Schedule E as if they were part of this Act. To that end, those Divisions are to be read as if

(1)  “under this subdivision” in section 23 was replaced by “under Division III of Chapter II of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures (2012, chapter 1) or under Division II of Chapter III of that Act” ;

(2)  “to section 10” in the first paragraph of section 24 was replaced by “to section 2.3 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures (2012, chapter 1)” ;

(3)  “to section 19 or 20, or section 21 as it read before being repealed” in the second paragraph of section 27 was replaced by “to section 3.5 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures (2012, chapter 1)” ; and

(4)  “under this chapter” in the first paragraph of section 31 was replaced by “under Chapter II or III of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures (2012, chapter 1)”.

2012, c. 1, s. 82.

83. Section 1 of the Regulation respecting the tariff of fees and the annual contribution payable under the Act respecting international financial centres (chapter C-8.3, r. 1) is deemed to be a regulation made under section 30 by the Minister of Finance for the purposes of Chapters II and III of Schedule E and applies to those chapters until the date of coming into force of the first regulation made by that Minister under that section for the purposes of those chapters. For that purpose, that section 1 is to be read

(1)  as if a reference to the Act was a reference to Chapters II and III of Schedule E to this Act;

(2)  as if “section 9 of the Act” in subparagraph 1 of the first paragraph was replaced by “section 2.3 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures (2012, chapter 1)” ;

(3)  as if “section 11 of the Act” in subparagraph 2 of the first paragraph was replaced by “section 2.5 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures” ;

(4)  as if “section 13 of the Act” in subparagraph 3 of the first paragraph was replaced by “section 2.8 or 3.3 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures” ;

(5)  as if “section 17 of the Act” in subparagraph 4 of the first paragraph was replaced by “section 2.10 or 3.5 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures” ;

(6)  as if “sections 10 and 12 of the Act” in subparagraph 5 of the first paragraph was replaced by “sections 2.3 and 2.5 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures” ; and

(7)  as if “sections 14 to 16 or sections 19 to 22 of the Act” in subparagraph 6 of the first paragraph was replaced by “sections 2.8 and 3.3 or sections 2.10 and 3.5 of Schedule E to the Act respecting the sectoral parameters of certain fiscal measures”.

2012, c. 1, s. 83.

84. If, before 5 March 2012, the responsible minister or body charged a fee for an act described in this Act, the responsible minister or body may continue to charge that fee until the date on which the first regulation under section 30 comes into force.

2012, c. 1, s. 84.

DIVISION III ADMINISTRATION

85. The Minister of Finance is responsible for the administration of this Act.

2012, c. 1, s. 85.

DIVISION IV FINAL PROVISIONS

86. Chapter I (except for the portion of section 2 before paragraph 1 and paragraph 5 of that section where they apply in respect of Chapter II or III of Schedule E), the first sentence of the first paragraph of section 12, the first paragraph of section 15, sections 60, 62, 69 and 77 and Schedules A to H (except for paragraph 4 of section 1.1 and Chapter V of Schedule C and the portion of section 1.1 before paragraph 3 and Chapters II and III of Schedule E) have effect from 1 January 2011.

2012, c. 1, s. 86.

87. The portion of section 2 before paragraph 1 and paragraph 5 of that section where they apply in respect of Chapter II or III of Schedule E, Chapter II, section 13, the first paragraph of section 22, sections 26, 39 to 46, 50, 52 to 59, 61, 81 to 83 and 85 and the portion of section 1.1 of Schedule E before paragraph 3, Chapter II of that Schedule (except for Division IV) and Chapter III of that Schedule (except for Division III) have effect from 31 March 2010.

2012, c. 1, s. 87.

88. (Omitted).

2012, c. 1, s. 88.

SCHEDULE A

INVESTISSEMENT QUÉBEC

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. Investissement Québec administers the sectoral parameters of the following fiscal measures:

(1) the deduction in respect of a foreign specialist working in the Montréal international trade zone at Mirabel provided for in sections 737.18.6 to 737.18.7.3, 737.18.9 to 737.18.10.1 and 737.18.13 of the Taxation Act (chapter I-3);

(2) the deduction in respect of manufacturing or processing businesses in the resource regions provided for in sections 737.18.18 to 737.18.26 and 1138.2.3 of the Taxation Act and sections 33, 34 and 34.1.0.1 of the Act respecting the Régie de l’assurance maladie du Québec (chapter R-5);

(3) the deduction in respect of a foreign specialist in respect of the new economy provided for in sections 737.22.0.1 to 737.22.0.4 of the Taxation Act;

(4) the tax credit for multimedia titles (general) provided for in sections 1029.8.36.0.3.8 to 1029.8.36.0.3.17 of the Taxation Act;

(5) the tax credit for corporations specialized in the production of multimedia titles provided for in sections 1029.8.36.0.3.18 to 1029.8.36.0.3.26 of the Taxation Act;

(6) the tax credit for corporations established in E-Commerce Place provided for in sections 1029.8.36.0.3.46 to 1029.8.36.0.3.59 of the Taxation Act and sections 34.1.9 to 34.1.11 of the Act respecting the Régie de l’assurance maladie du Québec;

(7) the tax credit for major employment-generating projects provided for in sections 1029.8.36.0.3.72 to 1029.8.36.0.3.78 of the Taxation Act;

(8) the tax holidays and tax credits to foster the development of the new economy provided for in sections 771, 771.1, 771.8.5, 771.12, 771.13, 1029.8.36.0.17 to 1029.8.36.0.36.1 and 1138.2.1 of the Taxation Act and sections 33 and 34 of the Act respecting the Régie de l’assurance maladie du Québec;

(9) the tax holidays and tax credits relating to the Montréal international trade zone at Mirabel provided for in sections 737.18.6, 737.18.6.1, 737.18.8 to 737.18.9.2, 737.18.11, 737.18.12, 1029.8.36.0.38 to 1029.8.36.0.93, 1130, 1137 and 1137.8 of the Taxation Act and section 34 of the Act respecting the Régie de l’assurance maladie du Québec;

(10) the tax credit for job creation in the resource regions, in the Aluminum Valley and in the Gaspésie and certain maritime regions of Québec provided for in sections 1029.8.36.72.82.1 to 1029.8.36.72.82.12 of the Taxation Act;

(11) the tax credit to promote employment in the Gaspésie and certain maritime regions of Québec provided for in sections 1029.8.36.72.82.13 to 1029.8.36.72.82.26 of the Taxation Act;

(12) the tax credit for the development of e-business provided for in sections 1029.8.36.0.3.79 to 1029.8.36.0.3.83 of the Taxation Act;

(13) the tax credit for the market diversification of manufacturing businesses provided for in sections 1029.8.36.0.119 to 1029.8.36.0.125 of the Taxation Act;

(14) the tax credit for scientific research and experimental development work carried on by a biopharmaceutical corporation provided for in sections 1029.7, 1029.7.0.1 and 1029.7.2.1 of the Taxation Act;

(15) the tax credit relating to information technology integration provided for in sections 1029.8.36.166.60.19 to 1029.8.36.166.60.35 of the Taxation Act;

(16) the tax credit for major digital transformation projects provided for in sections 1029.8.36.0.3.84 to 1029.8.36.0.3.87 of the Taxation Act;

(17) the tax credit for the digital transformation of print media provided for in sections 1029.8.36.0.3.88 to 1029.8.36.0.3.108 of the Taxation Act;

(18) the tax credit to support print media provided for in sections 1029.8.36.0.3.109 to 1029.8.36.0.3.119 of the Taxation Act; and

(19) the tax credit to foster synergy between Québec businesses provided for in sections 776.1.36 to 776.1.41 of the Taxation Act.

CHAPTER II

SECTORAL PARAMETERS OF DEDUCTION RELATING TO FOREIGN SPECIALIST WORKING IN MONTRÉAL INTERNATIONAL TRADE ZONE AT MIRABEL

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible activity” of a recognized business carried on by a corporation in a taxation year, or by a partnership in a fiscal period, means an activity that is specified in the business certificate, within the meaning of the first paragraph of section 10.3, held by the corporation or partnership in respect of the recognized business, and that is carried on in the Montréal international trade zone at Mirabel by the corporation in the year or by the partnership in the fiscal period;

“eligible employer” means a corporation or partnership that holds a valid business certificate within the meaning of the first paragraph of section 10.3;

“foreign specialist tax holiday” means the fiscal measure provided for in Title VII.2.2 of Book IV of Part I of the Taxation Act that allows an individual to deduct an amount in computing his or her taxable income for a taxation year under section 737.18.10 of that Act;

“Montréal international trade zone at Mirabel” has the meaning assigned by section 10.1;

“recognized business” of a corporation for a taxation year, or of a partnership for a fiscal period, means a business that the corporation or partnership declares it is carrying on in the year or fiscal period, and in respect of which the corporation or partnership holds a business certificate, within the meaning of the first paragraph of section 10.3.

Where a certificate referred to in the definition of “eligible employer” in the first paragraph is revoked retroactively, it is, for the purposes of that definition, deemed to be valid until the date of the notice of revocation.

2.2. In order for an individual who works for an eligible employer to benefit from the foreign specialist tax holiday for a taxation year, the eligible employer must have obtained a certificate in respect of the individual (in this chapter referred to as a “specialist certificate”). The certificate is valid only for the taxation year for which it was obtained.

However, subject to section 2.3, a specialist certificate obtained by an eligible employer in respect of an individual for a particular taxation year is valid only if the employment contract binding the individual to the employer was entered into before 13 June 2003.

2.3. For the purposes of this chapter, a contract resulting from the renewal, after 12 June 2003, of an employment contract referred to in the second paragraph of section 2.2 (in this section referred to as the “original contract”) is deemed not to be an employment contract separate from the original contract.

The rule set out in the first paragraph applies, with the necessary modifications, to a new employment contract that is entered into after 12 June 2003 with another eligible employer, which employer is deemed not to be an employer separate from the eligible employer (in this section referred to as the “first employer”) who entered into the original contract, provided that

(1) the other eligible employer declares to Investissement Québec that

(a) it controls, directly or indirectly, the first employer,

(b) it is, directly or indirectly, a controlled subsidiary of the first employer, or

(c) as a result of a transaction referred to in section 518 or 566 of the Taxation Act, it is carrying on the business of the first employer in the course of which the individual who entered into the original contract performed duties that met the conditions of section 2.5; and

(2) it may reasonably be considered that, but for the change of employer, the individual who entered into the original contract would have continued to be recognized as a foreign specialist in respect of the first employer, in accordance with section 2.5, until the time when the individual took up employment with the other eligible employer.

2.4. The parameters provided for in this chapter are administered by Investissement Québec only in the exercise of its powers of amendment and revocation.

DIVISION II

SPECIALIST CERTIFICATE

2.5. A specialist certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized as a specialist in respect of the employer for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

2.6. An individual may be recognized as a specialist in respect of an eligible employer if the individual is an administrator or professional whose expertise is widely recognized in the individual’s community and the individual’s duties with the employer are carried on exclusively or almost exclusively, on a continuous basis, in that capacity in the Montréal international trade zone at Mirabel and relate to the eligible activities of the recognized business carried on by the employer.

2.7. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as a specialist 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.

CHAPTER III

SECTORAL PARAMETERS OF TAX HOLIDAYS RELATING TO MANUFACTURING OR PROCESSING BUSINESSES IN RESOURCE REGIONS

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible region” means

(1) any of the following administrative regions described in the Décret concernant la révision des limites des régions administratives du Québec (chapter D-11, r. 1):

(a) Bas-Saint-Laurent administrative region (01),

(b) Saguenay–Lac-Saint-Jean administrative region (02),

(c) Abitibi-Témiscamingue administrative region (08),

(d) Côte-Nord administrative region (09),

(e) Nord-du-Québec administrative region (10), and

(f) Gaspésie–Îles-de-la-Madeleine administrative region (11);

(2) any of the following regional county municipalities:

(a) Municipalité régionale de comté d’Antoine-Labelle,

(b) Municipalité régionale de comté de La Vallée-de-la-Gatineau,

(c) Municipalité régionale de comté de Mékinac, and

(d) Municipalité régionale de comté de Pontiac; or

(3) the urban agglomeration of La Tuque, described in section 8 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations (chapter E-20.001);

“qualified total payroll” of a corporation for a taxation year means the qualified total payroll of the corporation for the year, as determined for the purposes of Title VII.2.4 of Book IV of Part I of the Taxation Act;

“tax holiday relating to manufacturing or processing businesses” means any of the following fiscal measures from which a corporation may benefit:

(1) the fiscal measure provided for in Title VII.2.4 of Book IV of Part I of the Taxation Act, under which the corporation may deduct an amount in computing its taxable income for a taxation year;

(2) the fiscal measure provided for in section 1138.2.3 of the Taxation Act, under which the corporation may benefit from a deduction in computing its paid-up capital for a taxation year; and

(3) the fiscal measure provided for in sections 33, 34 and 34.1.0.1 of the Act respecting the Régie de l’assurance maladie du Québec, which allows the corporation to benefit from a contribution exemption under the sixth paragraph of section 34 of that Act;

“total payroll” of a corporation for a taxation year means the total payroll of the corporation for the year, as determined for the purposes of Title VII.2.4 of Book IV of Part I of the Taxation Act.

3.2. A corporation must obtain a qualification certificate from Investissement Québec under this chapter for each taxation year ending after 31 December 2007 for which the corporation intends to benefit from a tax holiday relating to manufacturing or processing businesses.

DIVISION II

QUALIFICATION CERTIFICATE

3.3. A qualification certificate issued to a corporation under this chapter states whether or not a specified transfer of activities occurred at or before the end of the taxation year for which the application for the qualification certificate was filed. If applicable, the qualification certificate states the date of each specified transfer of activities, lists the activities it concerns and specifies the applicable tax benefit reduction factor for the year.

3.4. A transfer of activities is recognized as a specified transfer of activities if it occurs after 26 June 2007 and concerns activities of an establishment located in Québec, outside an eligible region.

However, a transfer of activities that occurred at any time in the part of the year 2007 that begins on 27 June is deemed to have occurred on or before 26 June of that year if, in the opinion of Investissement Québec, the transfer is the materialization of an agreement that was sufficiently advanced on the latter date.

3.5. A transfer of activities occurs at any time if activities are relocated from an establishment located in any place to an establishment of a corporation located in an eligible region and the relocation is carried out as part of the continuation of a business or part of a business by the corporation, as part of an outsourcing contract in favour of the corporation, or as a part of a reorganization of the business of the corporation.

The total payroll is the main factor to be taken into account in determining whether a transfer of activities occurred at any time.

3.6. The reduction factor that is applicable to a corporation for a taxation year corresponds to the proportion that the part of the corporation’s qualified total payroll, for the taxation year, that relates to the activities transferred as part of a specified transfer of activities that occurred at or before the end of the year is of all the corporation’s qualified total payroll for the year.

CHAPTER IV

SECTORAL PARAMETERS OF DEDUCTION RELATING TO FOREIGN SPECIALIST WORKING IN NEW ECONOMY SECTOR

DIVISION I

INTERPRETATION AND GENERAL

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

“biotechnology development centre” has the meaning assigned by section 9.1;

“eligible activity” of an eligible employer for a taxation year means,

(1) if the eligible employer is a corporation described in paragraph 1 of the definition of “eligible employer”, an activity of the employer that is mentioned in the corporation certificate, within the meaning of subparagraph 1 of the first paragraph of section 7.2, issued to the corporation for the year;

(2) if the eligible employer is a corporation described in paragraph 3 of the definition of “eligible employer”, an activity of the employer that is mentioned in the activities certificate, within the meaning of subparagraph 2 of the first paragraph of section 9.3, issued to the corporation for the year; or

(3) if the eligible employer is a corporation described in any of paragraphs 4 to 7 of the definition of “eligible employer”, an activity of a business of the employer that is referred to in that paragraph;

“eligible employer” for a taxation year means

(1) a corporation to which a corporation certificate, within the meaning of subparagraph 1 of the first paragraph of section 7.2, is issued for the year;

(2) a corporation that holds a valid exempt corporation certificate, within the meaning of the first paragraph of section 9.2;

(3) a corporation to which a specified corporation certificate, within the meaning of subparagraph 1 of the first paragraph of section 9.3, is issued for the year;

(4) a corporation to which an unrevoked qualification certificate has been issued in respect of a business it carries on in the year, for the purposes of Division II.6.0.1.7 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act;

(5) a corporation to which an unrevoked qualification certificate has been issued in respect of a business it carries on in the year, for the purposes of Division II.6.6.7 of that Chapter III.1;

(6) a corporation to which an unrevoked qualification certificate has been issued in respect of a business that is referred to in paragraph a of the definition of “recognized business” in the first paragraph of section 1029.8.36.72.56 of the Taxation Act and that the corporation carries on in the year, for the purposes of Division II.6.6.5 of that Chapter III.1; or

(7) a corporation to which an unrevoked qualification certificate has been issued in respect of a business that is referred to in paragraph b of the definition of “recognized business” in the first paragraph of section 1029.8.36.72.56 of that Act and that the corporation carries on in the year, for the purposes of that Division II.6.6.5;

“foreign specialist tax holiday” means the fiscal measure provided for in Title VII.3.1 of Book IV of Part I of the Taxation Act, under which an individual may deduct an amount in computing his or her taxable income for a taxation year.

For the purposes of the definition of “eligible employer” in the first paragraph, the following rules must be taken into consideration:

(1) where a qualification certificate or a certificate referred to in any of paragraphs 2 and 4 to 7 of that definition is revoked retroactively, it is deemed to be valid until the date of the notice of revocation; and

(2) where a certificate referred to in paragraph 1 or 3 of that definition is revoked, it is deemed to be valid for the whole taxation year for which it was issued.

4.2. In order for an individual who works for an eligible employer to benefit from the foreign specialist tax holiday for a taxation year, the eligible employer must obtain a certificate in respect of the individual (in this chapter referred to as a “specialist certificate”) from Investissement Québec. 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 certificate before 1 March of the calendar year that follows the taxation year concerned.

However, subject to section 4.3, a specialist certificate obtained by an eligible employer in respect of an individual for a particular taxation year is valid only if the employment contract binding the individual to the employer was entered into before 13 June 2003. This rule does not apply to a corporation described in paragraph 2 or 3 of the definition of “eligible employer” in the first paragraph of section 4.1 that carries on a business in a biotechnology development centre.

4.3. For the purposes of this chapter, a contract resulting from the renewal, after 12 June 2003, of an employment contract referred to in the third paragraph of section 4.2 (in this section referred to as the “original contract”) is deemed not to be an employment contract separate from the original contract.

The rule set out in the first paragraph applies, with the necessary modifications, to a new employment contract that is entered into after 12 June 2003 with another eligible employer, which employer is deemed not to be an employer separate from the eligible employer (in this section referred to as the “first employer”) who entered into the original contract, provided that

(1) the other eligible employer is a corporation described in the third paragraph;

(2) the other eligible employer declares to Investissement Québec that

(a) it controls, directly or indirectly, the first employer,

(b) it is, directly or indirectly, a controlled subsidiary of the first employer, or

(c) as a result of a transaction referred to in section 518 or 566 of the Taxation Act, it is carrying on the business of the first employer in the course of which the individual who entered into the original contract performed duties that met the conditions of section 4.5; and

(3) it may reasonably be considered that, but for the change of employer, the individual who entered into the original contract would have continued to be recognized as a specialist in respect of the first employer, in accordance with section 4.5, until the time when the individual took up employment with the other eligible employer.

The corporation to which subparagraph 1 of the second paragraph refers is,

(1) if the first employer is a corporation described in any of paragraphs 1 and 4 to 7 of the definition of “eligible employer” in the first paragraph of section 4.1, a corporation described in that paragraph;

(2) if the first employer is a corporation described in paragraph 2 of the definition of “eligible employer” in the first paragraph of section 4.1, a corporation described in that paragraph that does not carry on a business in a biotechnology development centre; or

(3) if the first employer is a corporation described in paragraph 3 of the definition of “eligible employer” in the first paragraph of section 4.1, either of the following corporations:

(a) if the new employment contract is entered into between 12 June 2003 and 31 March 2004, a corporation described in that paragraph, and

(b) if the new employment contract is entered into after 30 March 2004, a corporation described in that paragraph that does not carry on a business in a biotechnology development centre.

4.4. Where an eligible employer is not a corporation that is described in paragraph 2 or 3 of the definition of “eligible employer” in the first paragraph of section 4.1 and that carries on a business in a biotechnology development centre, the parameters provided for in this chapter are administered by Investissement Québec only in the exercise of its powers of amendment and revocation.

DIVISION II

SPECIALIST CERTIFICATE

4.5. A specialist certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized as a specialist in respect of the employer for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

4.6. An individual may be recognized as a specialist in respect of an eligible employer if

(1) unless the employer is a corporation described in paragraph 2 of the definition of “eligible employer” in the first paragraph of section 4.1, the individual’s duties with the employer are exclusively or almost exclusively, on a continuous basis, attributable to eligible activities of the employer; and

(2) the individual’s duties with the employer consist exclusively or almost exclusively, on a continuous basis, in carrying on any of, or a combination of, the following activities:

(a) training activities;

(b) research and development;

(c) specialized tasks with respect to innovation management, marketing, transfer of technologies or innovation financing;

(d) if the employer is a corporation described in any of paragraphs 1, 4 and 5 of the definition of “eligible employer” in the first paragraph of section 4.1, the development and operation of technological systems or infrastructures; and

(e) if the employer is a corporation described in paragraph 6 or 7 of the definition of “eligible employer” in the first paragraph of section 4.1, or a corporation described in paragraph 2 or 3 of that definition that carries on a business in a biotechnology development centre, another activity in connection with biotechnology.

4.7. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as a specialist 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.

4.8. An eligible employer to which a specialist 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 TAX CREDIT FOR MULTIMEDIA TITLES (GENERAL)

DIVISION I

INTERPRETATION AND GENERAL

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

“chroma key shooting” means any studio shooting in front of a plain coloured screen, generally blue or green, allowing, by means of electronic wizardry, the incorporation of objects, images or special effects in the final image;

“computer-aided special effects and animation” means special effects and animation sequences, as generally understood in the industry, created using digital technology, excluding effects that are strictly sound effects, subtitles and animation sequences essentially created by means of editing techniques;

“date of initial commercialization” of a title means, subject to the second paragraph, of a title means, subject to the second paragraph,

(1) in the case of a title distributed over the Internet, the date on which it is put online;

(2) in the case of a title designed to be used with a game console or on a computer, the date from which the master copy is ready to be reproduced for commercialization purposes; or

(3) its distribution date, in any other case;

“tax credit for multimedia titles” means the fiscal measure provided for in Division II.6.0.1.2 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;

“title” means an organized set of information.

The date of initial commercialization of a title developed by a corporation under a subcontract is the date on which the title is delivered to the client of the corporation.

5.2. To benefit from the tax credit for multimedia titles, a corporation must obtain a qualification certificate (in this chapter referred to as an “initial qualification certificate”) from Investissement Québec in respect of each title for which the corporation intends to claim the credit.

A corporation must also obtain a certificate (in this chapter referred to as a “production work certificate”) from Investissement Québec in respect of each such title. Certificates must be obtained for each taxation year for which the corporation intends to claim the tax credit for multimedia titles.

DIVISION II

INITIAL QUALIFICATION CERTIFICATE

5.3. An initial qualification certificate issued to a corporation certifies that the title referred to in the certificate is recognized as an eligible multimedia title or as an eligible related title, as the case may be. In addition, the certificate states

(1) (repealed);

(2) whether or not the title is intended to be commercialized;

(3) whether or not the title is available in a French version; and

(4) whether or not the title is a vocational training title.

Investissement Québec may no longer issue an initial qualification certificate in respect of a title where, on the date of initial commercialization of the title, the title meets neither the conditions to be recognized as an eligible multimedia title nor the conditions to be recognized as an eligible related title.

5.4. To be recognized as an eligible multimedia title, a title must, subject to section 5.9,

(1) be produced by the corporation referred to in section 5.2;

(2) contain a substantial volume of three of the following four types of information, in digital form: text, sound, still images and animated images; and

(3) be published on an electronic medium and controlled by software allowing interactivity.

However, a title is deemed to meet the condition of subparagraph 2 of the first paragraph if it is intended for users with a disability.

Similarly, a title that is part of another title produced by a corporation having no establishment in Québec is deemed to meet the conditions of subparagraphs 2 and 3 of the first paragraph if it is established to Investissement Québec’s satisfaction that the other title meets those conditions.

For the purposes of subparagraph 3 of the first paragraph, a title is controlled by software allowing interactivity if the user participates in all or substantially all of the action of the title. In determining whether that condition is met, the following elements must be taken into account:

(1) the feedback capability of the title;

(2) the control that the user may exert on the action of the title; and

(3) the adaptation potential of the title to the user’s needs.

5.5. To be recognized as an eligible related title, a title must, subject to section 5.9,

(1) be produced by the corporation referred to in section 5.2;

(2) contain a substantial volume of three of the following four types of information: text, sound, still images and animated images; and

(3) be linked to a main multimedia title that is subject to an intellectual property right or a licence held by the corporation referred to in section 5.2 or by another corporation with which the corporation is associated, so that it is related to that right or licence.

However, a title is deemed to meet the condition of subparagraph 2 of the first paragraph if it is intended for users with a disability.

Similarly, a title that is part of another title produced by a corporation having no establishment in Québec is deemed to meet the conditions of subparagraphs 2 and 3 of the first paragraph if it is established to Investissement Québec’s satisfaction that the other title meets those conditions.

5.6. A particular title is considered to be a main multimedia title in relation to another title (in this section referred to as a “related title”), if

(1) it is produced by the corporation that produces the related title or by a corporation associated with it;

(2) it meets the conditions of subparagraphs 2 and 3 of the first paragraph of section 5.4 or those of the first paragraph of section 6.4; and

(3) it is established to Investissement Québec’s satisfaction that the total labour expenditure, in respect of the title, of the corporation that produces it is at least $1,000,000 or that it is reasonable to expect that that total will be at least $1,000,000.

In addition, where the particular title is produced by a corporation associated with the corporation that produces the related title, it may be considered to be a main multimedia title, in relation to the related title, only if it is established to Investissement Québec’s satisfaction that the corporations are associated with each other throughout the period commencing at the beginning of the design stage of the related title and ending on its date of initial commercialization, or that it is reasonable to expect that they will be associated with each other throughout that period.

The conditions for recognition as an eligible related title are deemed never to have been met in respect of a given title that is linked to a main multimedia title where it appears, on the last day of the 12-month period following the date of initial commercialization of the given title, that the total labour expenditure, in respect of the main multimedia title, of the corporation that produces it is less than $1,000,000. The same applies where it appears, at a particular time in the period referred to in the second paragraph, that the corporation that produces the given title and the corporation that produces the main multimedia title are no longer associated with each other.

In this section, the total labour expenditure of a corporation in respect of a particular title is the aggregate of all amounts each of which is the amount of the corporation’s qualified labour expenditure for a particular taxation year, in respect of the particular title, within the meaning of the first paragraph of section 1029.8.36.0.3.8 of the Taxation Act, the portion of the corporation’s qualified labour expenditure for a particular taxation year that may reasonably be attributed to the particular title, within the meaning of the first paragraph of section 1029.8.36.0.3.18 of that Act, or the amount that would be the amount of the corporation’s qualified labour expenditure for a particular taxation year in respect of the particular title, within the meaning of the first paragraph of section 1029.8.36.0.3.8 of that Act, if the corporation were a qualified corporation within the meaning of that first paragraph. However, only the amounts that are incurred and paid on or before the day that is 12 months after the date of initial commercialization of the related title linked to the particular title and that relate exclusively to the production of the particular title may be taken into account.

5.7. (Repealed).

5.8. A title is considered to be intended for commercialization only if it is available to the public and genuine commercialization efforts are made.

5.9. The following titles may be recognized neither as eligible multimedia titles nor as eligible related titles:

(1) titles that essentially are interpersonal communication services such as electronic bulletin board systems, discussion forums or videoconferencing, or transactional services such as online shopping, electronic ticketing, cybermalls or online payment systems;

(2) titles designed to advertise a for-profit corporation, present its activities or promote its products or services; and

(3) titles that encourage violence, sexism or discrimination.

However, subparagraph 2 of the first paragraph does not operate to exclude a title that meets the conditions of the first paragraph of section 5.5 solely because it is designed to promote the main multimedia title to which it is linked.

DIVISION III

PRODUCTION WORK CERTIFICATE

5.10. A production work certificate issued to a corporation for a taxation year specifies the work carried out in the year, in respect of the title referred to in the certificate, that is recognized as eligible production work.

The certificate also states the name of the individuals who, in the taxation year and while in the service of the corporation or of a subcontractor not dealing at arm’s length with it, are directly engaged in such work. In addition, the certificate specifies the functions performed by each individual in the course of the work, the period during which the individual engaged in such work, the number of hours spent by the individual on such work and, if applicable, the name of the subcontractor not dealing at arm’s length for which the individual works.

The production work certificate states the name of any person or partnership, other than a subcontractor not dealing at arm’s length, with which the corporation entered into a subcontract, specifies which work referred to in the first paragraph is performed under the subcontract, and states the proportion, expressed as a percentage, that the services rendered to the corporation by the person or partnership in connection with such work is of all the services rendered to the corporation by the person or partnership.

Investissement Québec issues a production work certificate in relation to a title to a corporation only if the corporation holds a valid initial qualification certificate in respect of the title.

An individual is deemed, in a particular period in which the individual works for the corporation or for a subcontractor not dealing at arm’s length with it, to spend all the hours of work completed in the service of the corporation or subcontractor engaging in work recognized as eligible production work in respect of a title if, during the period, the individual spends at least 90% of those hours engaging in such work.

In this section, “subcontractor not dealing at arm’s length” with a corporation means a person or partnership in respect of whom the following conditions are met:

(1) the corporation and the person or partnership have entered into a subcontract concerning the carrying out of work referred to in the first paragraph; and

(2) the corporation is not dealing at arm’s length with the person or partnership at the time the subcontract is entered into.

5.11. To be recognized as eligible production work in relation to a title, work must be engaged in as of the beginning of the design stage and for the purpose of carrying out the stages in its production. Such work includes activities relating to the writing of the title’s script, the development of its interactive structure, the acquisition and production of its constituent elements, its computer and online development, the system architecture, the title’s community of users, the analysis of performance-related quantitative data for the purpose of optimizing the title’s performance, and technological activities relating to its updating. In the case of a title that is recognized as an eligible related title, such work also includes eligible computer-aided special effects and animation activities.

However, activities relating to the acquisition of copyrights or to the mastering, media duplication, promotion, distribution or dissemination of a title, other than activities relating to the system architecture or technological activities relating to the updating of the title, may not be recognized as eligible production work in respect of a title.

Activities relating to the system architecture include the design, installation, development and maintenance of the infrastructure that hosts a title, including the network and the servers required to operate it, the development of tools aimed at optimizing the operation, management and maintenance of such infrastructure, as well as the management of the system security and of the data access.

Activities relating to a title’s community of users means

(1) community development activities, which include activities relating to the establishment and maintenance of a link between the community and the online title development team in order to retain users of the title and attract new ones;

(2) activities related to the position of gamemaster, which include activities relating to the hosting and guidance of users in the community to enable them to take full advantage of all of the title’s potential; and

(3) technical services to the community, which include activities to coordinate and optimize user relations.

Technological activities relating to the installation of the new versions of a title, the updating of its contents, the optimization of the computer infrastructure in operation, and the regular or urgent maintenance tasks in connection with that infrastructure are technological activities relating to the updating of a title.

Activities that contribute directly to the creation of computer-aided special effects and animation and to chroma keying, such as motion capture, correction of animation curves, rendering, image retouching, graphics, filming, the use of computerized and automated animation benches, the use of computer-assisted automated cameras and chroma key shooting, are considered to be eligible computer-aided special effects and animation activities.

DIVISION IV

(Repealed)

5.12. (Repealed).

5.13. (Repealed).

CHAPTER VI

SECTORAL PARAMETERS OF TAX CREDIT FOR CORPORATIONS SPECIALIZED IN PRODUCTION OF MULTIMEDIA TITLES

DIVISION I

INTERPRETATION AND GENERAL

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

“chroma key shooting” means any studio shooting in front of a plain coloured screen, generally blue or green, allowing, by means of electronic wizardry, the incorporation of objects, images or special effects in the final image;

“date of initial commercialization” of a title means, subject to the second paragraph,

(1) in the case of a title distributed over the Internet, the date on which it is put online;

(2) in the case of a title designed to be used with a game console or on a computer, the date from which the master copy is ready to be reproduced for commercialization purposes; or

(3) its distribution date, in any other case;

“computer-aided special effects and animation” means special effects and animation sequences, as generally understood in the industry, created using digital technology, excluding effects that are strictly sound effects, subtitles and animation sequences essentially created by means of editing techniques;

“eligible title” means a title that is recognized by Investissement Québec under section 6.4 or 6.5 as an eligible multimedia title or as an eligible related title;

“tax credit for corporations specialized in the production of multimedia titles” means the fiscal measure provided for in Division II.6.0.1.3 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;

“title” means an organized set of information.

The date of initial commercialization of a title developed by a corporation under a subcontract is the date on which the title is delivered to the client of the corporation.

6.2. To benefit from the tax credit for corporations specialized in the production of multimedia titles, a corporation must obtain a certificate (in this chapter referred to as a “specialized corporation certificate”) from Investissement Québec, in respect of its activities for the purposes of Division II.6.0.1.3 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act.

A corporation must also obtain a certificate (in this chapter referred to as a “production work certificate”) from Investissement Québec, in respect of the group of titles for which the corporation intends to claim the tax credit.

The certificates referred to in the first and second paragraphs must be obtained for each taxation year for which the corporation wishes to benefit from the fiscal measure.

DIVISION II

SPECIALIZED CORPORATION CERTIFICATE

6.3. The specialized corporation certificate issued to a corporation for a taxation year certifies that at least 75% of the activities it carries on in Québec consist in producing, for itself or for another person or a partnership, eligible titles and, if applicable, in engaging in scientific research and experimental development relating to those titles. It specifies, as the case may be,

(1) that at least 75% of the eligible titles produced by the corporation in the year are to be commercialized, are available in a French version and are not vocational training titles, or that at least 75% of its gross revenue for the year is derived from such eligible titles;

(2) that at least 75% of the eligible titles produced by the corporation in the year are to be commercialized and are not vocational training titles, or that at least 75% of its gross revenue for the year is derived from such eligible titles; or

(3) that less than 75% of the eligible titles produced by the corporation in the year are to be commercialized and are not vocational training titles, and that less than 75% of its gross revenue for the year is derived from such eligible titles.

The specialized corporation certificate identifies the titles being produced by the corporation in the taxation year that are either titles described in the first paragraph of section 6.9 or titles that are not eligible titles for any other reason.

6.4. To be recognized as an eligible multimedia title, a title must, subject to section 6.9,

(1) contain a substantial volume of three of the following four types of information, in digital form: text, sound, still images and animated images; and

(2) be published on an electronic medium and controlled by software allowing interactivity.

However, a title is deemed to meet the condition of subparagraph 1 of the first paragraph if it is intended for users with a disability.

Similarly, a title that is part of another title produced by a corporation having no establishment in Québec is deemed to meet the conditions of the first paragraph if it is established to Investissement Québec’s satisfaction that the other title meets those conditions. This presumption also applies where the other title is produced by a corporation having an establishment in Québec, but only for the purposes of the first paragraph of section 6.3.

For the purposes of subparagraph 2 of the first paragraph, a title is controlled by software allowing interactivity if the user participates in all or substantially all of the action of the title. In determining whether that condition is met, the following elements must be taken into account:

(1) the feedback capability of the title;

(2) the control that the user may exert on the action of the title; and

(3) the adaptation potential of the title to the user’s needs.

6.5. To be recognized as an eligible related title, a title must, subject to section 6.9,

(1) contain a substantial volume of three of the following four types of information: text, sound, still images and animated images; and

(2) be linked to a main multimedia title that is subject to an intellectual property right or a licence held by the corporation that produces it or by another corporation with which the corporation is associated, so that it is related to that right or licence.

However, a title is deemed to meet the condition of subparagraph 1 of the first paragraph if it is intended for users with a disability.

Similarly, a title that is part of another title produced by a corporation having no establishment in Québec is deemed to meet the conditions of the first paragraph if it is established to Investissement Québec’s satisfaction that the other title meets those conditions. This presumption also applies where the other title is produced by a corporation having an establishment in Québec, but only for the purposes of the first paragraph of section 6.3.

6.6. A particular title is considered to be a main multimedia title in relation to another title (in this section referred to as a “related title”), if

(1) it is produced by the corporation that produces the related title or by a corporation associated with it;

(2) it meets the conditions of subparagraphs 2 and 3 of the first paragraph of section 5.4 or those of the first paragraph of section 6.4; and

(3) it is established to Investissement Québec’s satisfaction that the total labour expenditure, in respect of the title, of the corporation that produces it is at least $1,000,000 or that it is reasonable to expect that that total will be at least $1,000,000.

In addition, where the particular title is produced by a corporation associated with the corporation that produces the related title, it may be considered to be a main multimedia title, in relation to the related title, only if it is established to Investissement Québec’s satisfaction that the corporations are associated with each other throughout the period commencing at the beginning of the design stage of the related title and ending on its date of initial commercialization, or that it is reasonable to expect that they will be associated with each other throughout that period.

The conditions for recognition as an eligible related title are deemed never to have been met in respect of a given title that is linked to a main multimedia title where it appears, on the last day of the 12-month period following the date of initial commercialization of the given title, that the total labour expenditure, in respect of the main multimedia title, of the corporation that produces it is less than $1,000,000. The same applies where it appears, at a particular time in the period referred to in the second paragraph, that the corporation that produces the given title and the corporation that produces the main multimedia title are no longer associated with each other.

In this section, the total labour expenditure of a corporation in respect of a particular title is the aggregate of all amounts each of which is the amount of the corporation’s qualified labour expenditure for a particular taxation year, in respect of the particular title, within the meaning of the first paragraph of section 1029.8.36.0.3.8 of the Taxation Act, the portion of the corporation’s qualified labour expenditure for a particular taxation year that may reasonably be attributed to the particular title, within the meaning of the first paragraph of section 1029.8.36.0.3.18 of that Act, or the amount that would be the amount of the corporation’s qualified labour expenditure for a particular taxation year in respect of the particular title, within the meaning of the first paragraph of section 1029.8.36.0.3.8 of that Act, if the corporation were a qualified corporation within the meaning of that first paragraph. However, only the amounts that are incurred and paid on or before the day that is 12 months after the date of initial commercialization of the related title linked to the particular title and that relate exclusively to the production of the particular title may be taken into account.

6.7. (Repealed).

6.8. A title is considered to be intended for commercialization only if it is available to the public and genuine commercialization efforts are made.

6.9. The following titles may be recognized neither as eligible multimedia titles nor as eligible related titles:

(1) titles that essentially are interpersonal communication services such as electronic bulletin board systems, discussion forums or videoconferencing, or transactional services such as online shopping, electronic ticketing, cybermalls or online payment systems;

(2) titles designed to advertise a for-profit corporation, present its activities or promote its products or services; and

(3) titles that encourage violence, sexism or discrimination.

However, subparagraph 2 of the first paragraph does not operate to exclude a title that meets the conditions of the first paragraph of section 6.5 solely because it is designed to promote the main multimedia title to which it is linked.

DIVISION III

PRODUCTION WORK CERTIFICATE

6.10. A production work certificate issued to a corporation for a taxation year specifies the work carried out in the year by the corporation or, if applicable, on its behalf, in respect of any eligible title it produces, that is recognized as eligible production work.

The certificate also states the name of the individuals who, in the taxation year and while in the service of the corporation or of a subcontractor not dealing at arm’s length with it, are directly engaged in such work. In addition, the certificate specifies the functions performed by each individual in the course of the work, the percentage of the individual’s working time devoted to such work and, if applicable, the name of the subcontractor not dealing at arm’s length for which the individual works.

The production work certificate states the name of any person or partnership, other than a subcontractor not dealing at arm’s length, with which the corporation entered into a subcontract, specifies which work referred to in the first paragraph is performed under the subcontract, and states the proportion, expressed as a percentage, that the services rendered to the corporation by the person or partnership in connection with such work is of all the services rendered to the corporation by the person or partnership.

An individual is deemed, in a particular period in which the individual works for the corporation or for a subcontractor not dealing at arm’s length with it, to spend all of the individual’s working time for the corporation or subcontractor engaging in work recognized as eligible production work in respect of an eligible title the corporation produces if, during the period, the individual spends at least 90% of working time engaging in such work.

In this section, “subcontractor not dealing at arm’s length” with a corporation means a person or partnership in respect of whom the following conditions are met:

(1) the corporation and the person or partnership have entered into a subcontract concerning the carrying out of work referred to in the first paragraph; and

(2) the corporation is not dealing at arm’s length with the person or partnership at the time the subcontract is entered into.

6.11. To be recognized as eligible production work in relation to an eligible title, work must be engaged in as of the beginning of the design stage and for the purpose of carrying out the stages in its production. Such work includes activities relating to the writing of the title’s script, the development of its interactive structure, the acquisition and production of its constituent elements, its computer and online development, the system architecture, the title’s community of users, the analysis of performance-related quantitative data for the purpose of optimizing the title’s performance, and technological activities relating to its updating. In the case of an eligible title that is recognized as an eligible related title, such work also includes eligible computer-aided special effects and animation activities.

However, activities relating to the acquisition of copyrights or to the mastering, media duplication, promotion, distribution or dissemination of an eligible title, other than activities relating to the system architecture or technological activities relating to the updating of the title, may not be recognized as eligible production work in respect of an eligible title.

Activities relating to the system architecture include the design, installation, development and maintenance of the infrastructure that hosts an eligible title, including the network and the servers required to operate it, the development of tools aimed at optimizing the operation, management and maintenance of such infrastructure, as well as the management of the system security and of the data access.

Activities relating to an eligible title’s community of users means

(1) community development activities, which include activities relating to the establishment and maintenance of a link between the community and the online title development team in order to retain users of the title and attract new ones;

(2) activities related to the position of gamemaster, which include activities relating to the hosting and guidance of users in the community to enable them to take full advantage of all of the title’s potential; and

(3) technical services to the community, which include activities to coordinate and optimize user relations.

Technological activities relating to the installation of the new versions of an eligible title, the updating of its contents, the optimization of the computer infrastructure in operation, and the regular or urgent maintenance tasks in connection with that infrastructure are technological activities relating to the updating of an eligible title.

Activities that contribute directly to the creation of computer-aided special effects and animation and to chroma keying, such as motion capture, correction of animation curves, rendering, image retouching, graphics, filming, the use of computerized and automated animation benches, the use of computer-assisted automated cameras and chroma key shooting, are considered to be eligible computer-aided special effects and animation activities.

DIVISION IV

(Repealed)

6.12. (Repealed).

6.13. (Repealed).

CHAPTER VII

SECTORAL PARAMETERS OF TAX CREDIT FOR CORPORATIONS ESTABLISHED IN E-COMMERCE PLACE

DIVISION I

INTERPRETATION AND GENERAL

7.1. In this chapter,

“E-Commerce Place” means all the buildings located in Montréal at 1350 and 1360, boulevard René-Lévesque Ouest;

“tax credit relating to E-Commerce Place” means the fiscal measure provided for in Division II.6.0.1.6 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 or, if a corporation so elects for a taxation year, the fiscal measure provided for in subdivision 3.1 of Division I of Chapter IV of the Act respecting the Régie de l’assurance maladie du Québec, under which it is deemed to have made an overpayment to the Minister of Revenue under that Division I.

7.2. To benefit from the tax credit relating to E-Commerce Place, a corporation must obtain the following certificates from Investissement Québec:

(1) a certificate for the purposes of Division II.6.0.1.6 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act (in this chapter referred to as a “corporation certificate”); and

(2) a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as an “employee certificate”).

The certificates must be obtained for each taxation year for which the corporation intends to claim the tax credit.

However, Investissement Québec may deliver such certificates for a particular taxation year only if the following conditions are met in respect of the corporation that applied for them:

(1) a corporation certificate was issued to the corporation for the most recent taxation year, prior to the particular year, for which it filed a written application for that purpose before 12 June 2003;

(2) a corporation certificate was issued to the corporation for each taxation year that is between that prior year and the particular year; and

(3) at the time the certificates must be issued for the particular year, no certificate referred to in subparagraph 1 or 2 has been revoked.

If, at a particular time, Investissement Québec revokes a corporation certificate issued to the corporation for a given taxation year not prior to the taxation year referred to in subparagraph 1 of the third paragraph, any certificate issued to the corporation for a taxation year subsequent to the given year 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. The same applies to any employee certificate issued for the given year, except that the effective date of the deemed revocation is the date specified in the notice of revocation of the corporation certificate.

7.3. For the purpose of applying, for a particular taxation year, the third paragraph of section 7.2 in respect of a particular corporation resulting from a corporate reorganization involving at least one other corporation that held a valid corporation certificate for its taxation year ending immediately before the time of the reorganization or that includes that time (in this section and in section 7.4 referred to as the “reorganization year”), any corporation certificate issued to the other corporation, or, if there is more than one, to any of the other corporations, for any of its taxation years that is the reorganization year, the year referred to in subparagraph 1 of that third paragraph or a year between those two taxation years, or that is deemed to have been issued to the corporation because of this paragraph, is, subject to the second paragraph, deemed to have been issued to the particular corporation for the same taxation year. This paragraph is deemed to have applied before 1 January 2011 in respect of any other corporation resulting from a corporate reorganization, if a corporation certificate was issued to the other corporation before that date.

However, if a corporation certificate that was issued to a given corporation and to which the first paragraph would otherwise apply is revoked by Investissement Québec, none of the corporation certificates that were issued, or that are deemed to have been issued, to the given corporation are deemed to have been issued to the particular corporation under the first paragraph.

If, at a particular time, the application of the second paragraph causes the conditions of subparagraphs 1 and 2 of the third paragraph of section 7.2 to cease to be met in respect of the particular corporation for a particular taxation year, any certificate issued to the particular corporation 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 revoked.

In this section and in section 7.4, “corporate reorganization” means

(1) an amalgamation of corporations;

(2) the winding-up of a wholly-owned subsidiary into its parent; or

(3) a reorganization in the course of which a corporation transfers to another corporation all of its activities referred to in the unrevoked corporation certificate issued to the corporation for the taxation year that includes the time of the transfer, which time is considered to be the time of the reorganization, provided that all the issued shares of each class of shares of the capital stock of each of the two corporations that are parties to the transfer are owned by the same person or are owned by the same group of persons and are distributed among its members in such a manner that the proportion of issued shares of any class of shares of the capital stock of either of the two corporations that are owned by each member is identical to the proportion of issued shares of the corresponding class of shares of the capital stock of the other corporation that are owned by that member.

For the purposes of subparagraph 2 of the fourth paragraph, a corporation is a wholly-owned subsidiary of another corporation (in this section referred to as the “parent”), if at least 90% of all the issued shares of each class of shares of its capital stock are owned by the parent.

For the purposes of the first paragraph and of section 7.4, either the parent or the other corporation referred to in subparagraph 3 of the fourth paragraph is considered to be the corporation resulting from a corporate reorganization, depending on whether the reorganization is described in subparagraph 2 or 3 of that fourth paragraph.

The corporation certificate held for the reorganization year by the corporation that transferred all its activities referred to in the certificate is deemed to be revoked by Investissement Québec as of the time of the reorganization. However, this presumption does not apply in respect of the second paragraph.

DIVISION II

CORPORATION CERTIFICATE

7.4. A particular corporation certificate issued to a corporation for a taxation year certifies that at least 75% of the activities carried on by the corporation in the premises it occupies in E-Commerce Place for the year consist in developing and supplying products and services relating to e-business or are activities relating to the operation of e-business solutions. The particular certificate also lists the corporation’s activities that are recognized as such.

If the corporation is a particular corporation referred to in the first paragraph of section 7.3 for the taxation year, the particular certificate must specify the time of the corporate reorganization as well as the names of all other corporations holding a valid corporation certificate for the reorganization year which, at the time of issue, had not been revoked by Investissement Québec. It also specifies, if applicable, for each of the other corporations listed in the certificate that, for a preceding taxation year, was itself a particular corporation referred to in the first paragraph of section 7.3, both the time of the preceding reorganization from which it resulted and the names of all other corporations holding a valid corporation certificate for the year of that preceding reorganization which, at the time of issue, had not been revoked by Investissement Québec.

If part of the premises is not yet available for occupation, the corporation must establish to Investissement Québec’s satisfaction that it has entered into a lease to occupy that part of the premises at the earliest date possible. Once that fact is established, the corporation is deemed, for the purposes of the first paragraph, to carry on, in that part of the premises and throughout the period during which it may not occupy it, the activities that it carries on elsewhere and that are listed in the particular certificate.

7.5. Subject to section 7.7, each of the following activities is an activity consisting in developing and supplying products and services relating to e-business:

(1) consulting in information technology or e-business solutions and processes;

(2) the development, integration or implementation of information systems or technology infrastructures;

(3) the design or development of e-commerce solutions;

(4) the development of security services relating to e-commerce activities;

(5) the development of distribution software packages; and

(6) the development of electronic banking relating to e-commerce activities.

7.6. Subject to section 7.7, each of the following activities is an activity relating to the operation of e-business solutions:

(1) the processing of electronic transactions through a transactional website; and

(2) the management, operation, maintenance or evolution of systems, applications or infrastructures, namely,

(a) the management of processing centres relating to e-business,

(b) the management of remote operation centres,

(c) the maintenance or evolution of e-business applications or solutions,

(d) the management of local or wide area networks,

(e) the operation of 24/7 technical assistance services to businesses and customers,

(f) the management of customer service centres deriving from e-commerce activities,

(g) the operation of technological outsourcing services, and

(h) the operation of business process outsourcing services relating to the operation of an e-business solution (back office), or the management of business processes in connection with the internal operation of an e-business solution (internal back office) if those processes involve the centralization, consolidation and coordination of back office activities of the corporation in the same place and if the centralization of the corporation’s business processes allows more than one of its establishments in Québec and elsewhere to be served.

7.7. The following activities are neither activities consisting in developing and supplying products and services relating to e-business, nor activities relating to the operation of e-business solutions:

(1) the repair, maintenance and reconditioning of hardware or equipment;

(2) the manufacturing of machines, instruments, components, parts, hardware or equipment;

(3) the assembly of parts or components, such as the assembly of television sets, computer monitors, calculators or cash registers;

(4) audio or video signal distribution services via television broadcasting, telephony, cable broadcasting, satellites or other cellular networks;

(5) the operation of radio or television broadcasting satellites, studios or networks;

(6) cinematography, including postproduction, and audiovisual production, including television programs, that do not relate to a global e-business solution;

(7) teleconferencing services;

(8) an Internet access service, unless it is provided in the course of supplying an e-business solution;

(9) the publishing of books or newspapers and the production of disks;

(10) training provided by a specialized school or body;

(11) a telemarketing activity;

(12) an activity relating to surveys; and

(13) the business processes relating to human resources management, credit card processing and any activity that does not refer to an e-business activity or to the management, maintenance or evolution of centralized computerized systems or infrastructures.

DIVISION III

EMPLOYEE CERTIFICATE

7.8. An employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

7.9. An individual may be recognized as an eligible employee of a corporation, if

(1) the individual works full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks;

(2) all or substantially all of the individual’s duties consist in undertaking, supervising or directly supporting work relating to an activity of the corporation referred to in section 7.5 or 7.6; and

(3) the individual performs his or her duties either in the corporation’s premises that are situated in E-Commerce Place, or elsewhere but in connection with contracts attributable to the business carried on by the corporation in those premises.

For the purposes of subparagraph 2 of the first paragraph, an individual’s administrative tasks are not to be considered as part of duties consisting in undertaking, supervising or directly supporting work relating to an activity of the corporation referred to in section 7.5 or 7.6.

In this section, “administrative tasks” include tasks relating to commercialization, operations management, accounting, finance, legal affairs, public relations, communications, contract solicitation, and human and physical resources management.

7.10. The number of employee certificates that Investissement Québec may issue to a corporation for a taxation year may not exceed the result obtained by dividing the total area of the premises occupied by the corporation in E-Commerce Place by the area of the average reasonable space intended for the exclusive use of an individual recognized as an eligible employee of the corporation for the year and that is needed by that individual to perform his or her duties.

The area of the average reasonable space is assessed taking into account the nature of the duties performed and the proportion that, for the same work shift, each type of work station of the corporation for which an employee certificate may be issued is of all such work stations.

7.11. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as an eligible employee of a corporation, 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.

CHAPTER VIII

SECTORAL PARAMETERS OF TAX CREDIT FOR MAJOR EMPLOYMENT-GENERATING PROJECTS

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible contract” of a corporation means a contract that is entered into by the corporation and that is recognized as an eligible contract under a current certificate issued in its respect;

“qualifying period” of a corporation, in relation to a contract, means, depending on whether the first day on which activities in connection with the contract are carried on is or is not prior to 2 January 2007, the 24- or 36-month period that begins

(1) if the corporation certificate in relation to the contract was issued to the corporation after 19 December 2007, on 31 December 2008 or, if it is earlier, on that first day, or

(2) in any other case, on that first day;

“tax credit for major employment-generating projects” means the fiscal measure provided for in Division II.6.0.1.8 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.

8.2. To benefit from the tax credit for major employment-generating projects, in relation to a particular contract, a corporation must obtain the following certificates from Investissement Québec:

(1) a certificate in respect of the corporation, in relation to the particular contract (in this chapter referred to as a “corporation certificate”);

(2) a certificate in respect of the particular contract (in this chapter referred to as a “contract certificate”); and

(3) a certificate in respect of each individual for whom, in relation to the particular contract, the corporation claims the tax credit (in this chapter referred to as an “employee certificate”).

Employee certificates must be obtained for each taxation year for which the corporation intends to benefit from the tax credit. However, Investissement Québec may not issue an employee certificate to a corporation for a taxation year that begins after 31 December 2016.

Investissement Québec may issue a certificate referred to in subparagraph 1 or 2 of the first paragraph to a corporation only if it filed an application for that purpose with Investissement Québec before 1 April 2008.

The revocation by Investissement Québec of a contract certificate in respect of a particular contract entails the revocation of the related corporation certificate. In such a case, the notice of revocation of the contract certificate is considered to be a notice of revocation of the corporation certificate as well.

Investissement Québec may issue an employee certificate to a corporation in relation to a particular contract, for a particular taxation year, only if the corporation certificate held by the corporation, in relation to the contract, is valid for all or part of the particular year.

If, at a particular time, Investissement Québec revokes a corporation certificate issued to a corporation, in relation to a particular contract, any employee certificate issued to the corporation, in relation to the contract, for a taxation year subsequent to the given year that includes the date on which the revocation becomes effective 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. The same applies to such an employee certificate issued for the given year, except that the effective date of the deemed revocation is the date specified in the notice of revocation of the corporation certificate.

8.3. If the carrying out of a particular contract devolves on a particular corporation and the particular corporation resulted from a corporate reorganization involving another corporation that held, immediately before the reorganization, in relation to the particular contract, a corporation certificate and a contract certificate that had not been revoked, the following rules apply:

(1) the particular corporation, the other corporation and any other corporation involved in a preceding reorganization, in respect of which this subparagraph applied in relation to the particular contract, are, for the purpose of applying sections 8.5 and 8.16 to those corporations, deemed to be a single corporation, unless their corporation certificate, in relation to the contract, is revoked;

(2) for the purposes of the third paragraph of section 8.2, the particular corporation is deemed to have filed its application for a corporation certificate and a contract certificate, in relation to the particular contract, on or before 31 March 2008; and

(3) for the purposes of subparagraph 1 of the first paragraph of section 8.8, the particular corporation is deemed to have entered into the particular contract before 1 January 2008.

Subparagraph 1 of the first paragraph is deemed to have applied, in relation to the particular contract, before 1 January 2011 in respect of any other corporation involved in a corporate reorganization, if a corporation certificate and a contract certificate, in relation to the contract, were issued to the corporation resulting from the reorganization for a period beginning before that date.

If the reorganization is described in subparagraph 3 of the seventh paragraph, the other corporation must provide to the particular corporation a copy of any certificate, in relation to the particular contract, issued to it by Investissement Québec or, if the other corporation itself resulted from a preceding corporate reorganization, any copy of such a certificate that was provided to it by the other corporation involved in that preceding reorganization.

The corporation certificate and the contract certificate, in relation to the particular contract, held by the other corporation immediately before the reorganization are deemed to be revoked by Investissement Québec as of the time of the reorganization. The same applies to any employee certificate held by the corporation for the taxation year that ends immediately before the time of the reorganization or that includes that time.

The corporation certificate issued to the particular corporation, in relation to a particular contract entered into by the particular corporation after 31 December 2007 or following an application it filed after 31 March 2008, is deemed to be revoked by Investissement Québec as of the date of its coming into force, if, after the time of the corporate reorganization from which it resulted, Investissement Québec revokes any of the following certificates, in relation to the contract:

(1) the corporation certificate issued to another corporation referred to in subparagraph 1 of the first paragraph, following the last application for a corporation certificate that was filed before 1 April 2008;

(2) the corporation certificate issued to any other corporation referred to in that subparagraph 1, following an application filed after 31 March 2008;

(3) the corporation certificate issued to another corporation referred to in that subparagraph 1 that is the last corporation to have entered into the particular contract before 1 January 2008; or

(4) the corporation certificate issued to any other corporation referred to in that subparagraph 1 that entered into the particular contract after 31 December 2007.

The fifth paragraph does not apply if the effective date of the revocation of any of the certificates referred to in subparagraphs 1 to 4 of that paragraph precedes the time of the corporate reorganization in which the other corporation is involved.

In this section, “corporate reorganization” means

(1) an amalgamation of corporations;

(2) the winding-up of a wholly-owned subsidiary into its parent; or

(3) the carrying on, as of a particular time, of a business by a corporation, if the business was, immediately before that time, carried on by another corporation and the other corporation was carrying out, in the course of the business, a contract that was an eligible contract of the other corporation.

For the purposes of subparagraph 2 of the seventh paragraph, a corporation is a wholly-owned subsidiary of another corporation (in this chapter referred to as the “parent”) if at least 90% of all the issued shares of each class of shares of its capital stock are owned by the parent.

For the purposes of this chapter, either the parent or the corporation described in subparagraph 3 of the seventh paragraph is considered to be the corporation resulting from a corporate reorganization, depending on whether the reorganization is described in subparagraph 2 or 3 of that paragraph.

DIVISION II

CORPORATION CERTIFICATE

8.4. A corporation certificate issued to a corporation, in relation to a particular contract, certifies that the corporation operates in the field of information technologies under the contract. The corporation certificate also confirms that, in the opinion of Investissement Québec, the carrying out of the contract will result in the creation of at least 150 jobs in the 36-month period that is specified in the corporation certificate and that begins on the earlier of

(1) 31 December 2008; and

(2) the date on which activities in connection with the contract are first carried on.

However, if the corporation certificate, in relation to a contract, is issued to a particular corporation resulting from a corporate reorganization described in the seventh paragraph of section 8.3, Investissement Québec must instead specify in the corporation certificate the 24- or 36-month period that applied to the other corporation involved in the reorganization, in relation to the contract.

8.5. Investissement Québec is justified in revoking a corporation certificate, in relation to a particular contract, issued to a corporation, if it is evident, at the end of the corporation’s qualifying period in relation to the contract, that the number of jobs created, during that period, because of the carrying out of the contract, did not exceed 149 at any time. The effective date of the revocation is the date of coming into force of the corporation certificate.

If a corporation certificate, in relation to a particular contract, issued to a corporation is revoked at a particular time by Investissement Québec under the first paragraph, the contract certificate in respect of the contract and any employee certificate, in relation to the contract, issued to the corporation are deemed to be revoked at that time by Investissement Québec. The effective date of each deemed revocation is the date of coming into force of the certificate that is deemed to be revoked.

8.6. To determine whether a corporation meets the job creation requirement to which sections 8.4 and 8.5 refer, in relation to a particular contract, Investissement Québec must only count the number of jobs created each of which is held by an individual in respect of whom an employee certificate has been issued to the corporation, in relation to the contract.

However, the first paragraph applies with reference to the following rules:

(1) if an employee certificate in respect of an individual could be issued to the corporation, in relation to the particular contract, but for section 8.18, Investissement Québec may count the job held by the individual; and

(2) if, in any period, the corporation carries out two or more particular contracts that are eligible contracts of the corporation and two or more employee certificates are issued to it in respect of the same individual who works for the corporation, in relation to the particular contracts, Investissement Québec may only count the job held by the individual in relation to one of those contracts.

DIVISION III

CONTRACT CERTIFICATE

8.7. A contract certificate issued to a corporation certifies that the contract referred to in the certificate is recognized as an eligible contract. It also lists the activities carried on under the contract.

8.8. A contract entered into by a corporation may be recognized as an eligible contract, if

(1) the contract is entered into after 31 December 2004 and before 1 January 2008;

(2) the activities carried on under the contract consist in

(a) developing and supplying products and services relating to e-business;

(b) activities relating to the operation of e-business solutions; or

(c) activities of a customer relations centre that provides support, at a transactional level, to a sales and marketing service and whose technological environment uses various media in the context of technological convergence in computer telephony;

(3) the majority of the activities carried on under the contract are not activities in respect of which the corporation avails itself of a fiscal measure referred to in another chapter of this schedule; and

(4) subject to the second paragraph, the contract is not a subcontract entered into with a person or partnership with whom the corporation is not dealing at arm’s length.

Subparagraph 4 of the first paragraph does not apply if

(1) the corporation establishes to Investissement Québec’s satisfaction that the contract relates to services that are ultimately provided to a customer who is a person or partnership with whom the corporation is dealing at arm’s length and that relate to a business all or substantially all of which is carried on outside Québec by the customer; and

(2) the activity subcontracted to the corporation under the contract was not carried on in Québec before the contract was entered into.

8.9. Subject to section 8.12, each of the following activities consist in developing and supplying products and services relating to e-business:

(1) consulting in information technology or e-business solutions and processes;

(2) the development, integration or implementation of information systems or technology infrastructures;

(3) the design or development of e-commerce solutions;

(4) the development of security services relating to e-commerce activities;

(5) the development of distribution software packages; and

(6) the development of electronic banking relating to e-commerce activities.

8.10. Subject to section 8.12, each of the following activities is an activity relating to the operation of e-business solutions:

(1) the processing of electronic transactions through a transactional website; and

(2) the management, operation, maintenance or evolution of systems, applications or infrastructures, namely,

(a) the management of processing centres relating to e-business,

(b) the management of remote operation centres,

(c) the maintenance or evolution of e-business applications or solutions,

(d) the management of local or wide area networks,

(e) the operation of technological outsourcing services, and

(f) the operation of business process outsourcing services relating to the operation of an e-business solution (back office), or the management of business processes in connection with the internal operation of an e-business solution (internal back office) if those processes involve the centralization, consolidation and coordination of back office activities of the corporation in the same place and if the centralization of the corporation’s business processes allows more than one of its establishments in Québec and elsewhere to be served.

8.11. Subject to the second paragraph and section 8.12, each of the following activities is an activity related to the operation of a customer relations centre:

(1) e-commerce customer relations management, if the products sold are related to information technologies;

(2) technical assistance to businesses and customers (help desk) related to the use of an e-business solution or of a product that supports such a solution, provided such assistance relates to the technical aspects of the product; and

(3) customer service directly related to the use of an e-commerce solution.

An activity described in the first paragraph is considered to be an activity related to the operation of a corporation’s customer relations centre only if

(1) the corporation carries on activities consisting mostly in dealing with incoming calls, unless the corporation provides e-commerce customer relations management services;

(2) the corporation carries on activities in a specialized field and its employees have specialized training; and

(3) the corporation’s technological environment uses various media, allowing for the convergence of new technologies.

An activity described in subparagraph 2 of the first paragraph does not include the management of subscriptions to a cellular telephony service, such as the management of plan changes and the management of the warranties of a product that supports an e-business solution.

8.12. The following activities are neither activities consisting in developing and supplying products and services relating to e-business, nor activities related to the operation of e-business solutions, nor activities related to the operation of a customer relations centre:

(1) the installation, repair, maintenance and reconditioning of hardware or equipment;

(2) the manufacturing of machines, instruments, components, parts, hardware or equipment;

(3) the assembly of parts or components, such as the assembly of television sets, computer monitors, calculators or cash registers;

(4) traditional audio or video signal distribution services via television broadcasting, telephony, cable broadcasting, satellites or other cellular networks that do not support e-business solutions;

(5) the operation of radio or television broadcasting satellites, studios or networks;

(6) cinematography, including postproduction, and audiovisual production, including television programs, that do not relate to a global e-business solution;

(7) teleconferencing services;

(8) the publishing of books or newspapers, and the production of disks, with a view to commercializing, promoting and financing applications;

(9) training provided by a specialized school or body;

(10) a telemarketing activity;

(11) an activity relating to surveys; and

(12) the business processes relating to human resources management, credit card processing and any activity that does not refer to an e-business activity or to the management, maintenance or evolution of centralized computerized systems or infrastructures.

DIVISION IV

EMPLOYEE CERTIFICATE

8.13. An employee certificate issued to a corporation, in relation to a particular contract, certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation, in relation to the contract, for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

8.14. An individual may be recognized as an eligible employee of a corporation, in relation to a particular contract, if

(1) the individual works full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks;

(2) at least 75% of the individual’s duties consist in undertaking, supervising or directly supporting activities carried on under one or more eligible contracts of the corporation; and

(3) the particular contract is an eligible contract referred to in subparagraph 2.

For the purposes of subparagraph 2 of the first paragraph, an individual’s administrative tasks are not to be considered as part of duties consisting in undertaking, supervising or directly supporting activities carried on under an eligible contract of the corporation.

In this section, “administrative tasks” include tasks relating to commercialization, operations management, accounting, finance, legal affairs, public relations, communications, contract solicitation, and human and physical resources management.

8.15. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as an eligible employee of a corporation, 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.

8.16. Investissement Québec may not, for a particular period, issue any employee certificate to a corporation, in relation to a particular contract if, during that particular period, which is included in the job maintenance period, in relation to the contract, determined in accordance with the second paragraph, the corporation does not maintain at least 150 jobs that relate to the activities carried on under the contract.

The job maintenance period, in relation to a particular contract entered into by a corporation, is the period beginning on the last day, included in the corporation’s qualifying period, in relation to the contract, where at least 150 jobs created by the corporation during the qualifying period were held by individuals whose duties with the corporation were related to the activities carried on under the contract, and ending

(1) where a reduced activity period is determined in accordance with the third paragraph, in relation to the particular contract, on the day that precedes the day on which the reduced activity period begins; and

(2) in any other case, on the last day during which the corporation carried on activities under the particular contract.

Subject to the fourth paragraph, a corporation’s reduced activity period, in relation to a particular contract, is

(1) where the contract has an expected term of four years or less, the period, if any, not exceeding six months that ends on the day specified in the particular contract as the last day for its carrying out and that begins after the end of the corporation’s qualifying period in relation to the contract; and

(2) in any other case, the 12-month period ending on

(a) 31 December 2016, if the particular contract has an indefinite term, or

(b) the day specified in the particular contract as the last day for its carrying out, if it has a set term.

However, no reduced activity period is determined, in relation to a particular contract entered into by a corporation, if the corporation failed to maintain at least 150 jobs that relate to the activities carried on under the contract, for at least half of the 12-month period ending on the day preceding the day on which the reduced activity period, in relation to the contract, would otherwise have begun. The same applies if, before the day on which the reduced activity period would otherwise have begun, the corporation prematurely terminates the carrying out of the particular contract before 1 January 2017, either because the corporation has been placed under a receiving order issued under the Bankruptcy and Insolvency Act (R.S.C. 1985, c. B-3) or has made an assignment of property under that Act, or by reason of superior force or any other event that affected it.

8.17. In determining the number of jobs that relate to the carrying on of activities under a particular contract, Investissement Québec must only count the number of jobs each of which is held by an individual who meets the conditions of section 8.14, in relation to the contract, for recognition as an eligible employee of the corporation. However, if the corporation carries out, in any period, two or more particular contracts that are eligible contracts of the corporation and an individual who works for it meets the conditions of section 8.14 in relation to those particular contracts, Investissement Québec may only count the job held by the individual in relation to one of those contracts.

8.18. Investissement Québec may not issue an employee certificate in respect of an individual to a corporation for a taxation year or part of the taxation year, if such a certificate in respect of the individual has been issued, for the same year or part of year, under another chapter of this schedule.

CHAPTER IX

SECTORAL PARAMETERS OF TAX HOLIDAYS AND TAX CREDITS TO FOSTER DEVELOPMENT OF NEW ECONOMY

DIVISION I

INTERPRETATION AND GENERAL

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

“biotechnology development centre” means a set of buildings or parts of a building each of which meets the following conditions:

(1) it has been designated as forming part of one of the centres mentioned in the first paragraph of section 9.5 either by Investissement Québec after 31 December 2010 under that paragraph, or by Investissement Québec or the Minister of Finance before 1 January 2011;

(2) the designation has not been cancelled; and

(3) it is located at one of the addresses mentioned in respect of that centre in the third paragraph of section 9.5;

“Centre national des nouvelles technologies de Québec” means all of the buildings and parts of a building each of which is located at one of the addresses mentioned in the third paragraph of section 9.7 and meets the following conditions:

(1) it was designated as forming part of that centre either by Investissement Québec after 31 December 2010 under the first paragraph of section 9.7, or by Investissement Québec or the Minister of Finance before 1 January 2011; and

(2) the designation has not been cancelled;

“Cité du multimédia” means all of the buildings each of which is located in Montréal at

(1) 711 or 731, rue de la Commune;

(2) 10 or 111, rue Duke;

(3) 33 or 87, rue Prince;

(4) 50, 75 or 80, rue Queen; or

(5) 700, rue Wellington;

“designated site” means

(1) a biotechnology development centre;

(2) a new economy centre;

(3) the Centre national des nouvelles technologies de Québec; or

(4) the Cité du multimédia;

“fiscal measure relating to an innovative project” means any of the following fiscal measures that a corporation holding a certificate for carrying on a business in a qualified centre referred to in the first paragraph of section 9.2 may benefit from:

(1) a tax credit on qualified wages;

(2) a tax credit relating to the acquisition or rental of property;

(3) a tax credit relating to the rental of an eligible facility;

(4) the fiscal measure provided for in sections 771, 771.1.1, 771.8.5, 771.12 and 771.13 of the Taxation Act, which allows the corporation to deduct an amount under subparagraphs i to iii of paragraph j of subsection 1 of section 771 of that Act in computing its tax payable for a taxation year under Part I of that Act;

(5) the fiscal measure provided for in section 1138.2.1 of the Taxation Act, under which the corporation may deduct an amount in computing its paid-up capital for a taxation year; and

(6) the fiscal measure provided for in sections 33 and 34 of the Act respecting the Régie de l’assurance maladie du Québec, which allows the corporation to obtain a contribution exemption under subparagraphs a and a.1 of the seventh paragraph of section 34 of that Act;

“information technology development centre” means one or more of the following buildings or parts of a building:

(1) in the case of the centre in Gatineau, the buildings located at 200, rue Montcalm and at 490, boulevard Saint-Joseph;

(2) in the case of the centre in Laval, the building located at 440, boulevard Armand-Frappier;

(3) in the case of the centre in Montréal, all of the buildings or parts of a building designated by the Minister of Finance as forming part of the centre, each of which is located at one of the addresses mentioned in the definition of “Cité du multimédia” ;

(4) in the case of the centre in Québec, all of the buildings or parts of a building designated by the Minister of Finance as forming part of the centre, each of which is located at one of the addresses mentioned in the third paragraph of section 9.7; and

(5) in the case of the centre in Sherbrooke, the buildings located at 740, rue Galt Ouest and at 2424, rue King Ouest;

“new economy centre” means a set of buildings or parts of a building each of which meets the following conditions:

(1) it was designated as forming part of one of the centres listed in the second paragraph of section 9.6 either by Investissement Québec after 31 December 2010 under the first paragraph of that section, or by Investissement Québec or the Minister of Finance before 1 January 2011; and

(2) the designation has not been cancelled;

“qualified centre” means

(1) a biotechnology development centre;

(2) an information technology development centre; or

(3) a new economy centre;

“tax credit on qualified wages” means the fiscal measure provided for in Division II.6.0.3 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, which allows a corporation carrying on its business in a qualified centre to be deemed under section 1029.8.36.0.19, 1029.8.36.0.20 or 1029.8.36.0.30 of that division to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year;

“tax credit on specified wages” means the fiscal measure provided for in Division II.6.0.3 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, which allows a corporation carrying on its business in a designated site to be deemed under section 1029.8.36.0.22 or 1029.8.36.0.31 of that division to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year;

“tax credit relating to the acquisition or rental of property” means the fiscal measure provided for in Division II.6.0.3 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, which allows a corporation carrying on a business in a qualified centre to be deemed under section 1029.8.36.0.25 or 1029.8.36.0.32 of that division to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year;

“tax credit relating to the new economy” means a fiscal measure that a corporation holding a certificate referred to in subparagraph 1 of the first paragraph of section 9.3 may benefit from and that is

(1) if the corporation carries on a business in a biotechnology development centre, any of the following fiscal measures:

(a) a tax credit on specified wages,

(b) a tax credit relating to the acquisition or rental of property, and

(c) a tax credit relating to the rental of an eligible facility; and

(2) in any other case, a tax credit on specified wages;

“tax credit relating to the rental of an eligible facility” means the fiscal measure provided for in Division II.6.0.3 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, which allows a corporation carrying on a business in a biotechnology development centre to be deemed under section 1029.8.36.0.25.1 or 1029.8.36.0.32.1 of that division to have paid an amount to the Minister of Revenue on account of its tax payable under that Part for a taxation year.

9.2. To benefit from a fiscal measure relating to an innovative project, a corporation must hold a valid certificate for carrying on a business in a qualified centre (in this chapter referred to as an “exempt corporation certificate”). In the case of the tax credit relating to the acquisition or rental of property, the corporation must also hold a valid certificate in respect of each property for which it claims the tax credit (in this chapter referred to as a “property certificate”).

If the fiscal measure is the tax credit on qualified wages, the corporation must obtain a certificate from Investissement Québec in respect of each individual for whom it claims the tax credit (in this chapter referred to as an “eligible employee certificate”). Such certificates must be obtained for each taxation year for which the corporation intends to claim the tax credit.

If the corporation carries on a business in a biotechnology development centre, the corporation must, to benefit from the tax credit relating to the rental of an eligible facility, obtain from the person who owns the facility, in relation to the centre, for which the corporation claims the tax credit a copy of the certificate relating to the facility that the person obtained from Investissement Québec (in this chapter referred to as a “facility certificate”).

However, Investissement Québec may not, for a particular taxation year, issue a certificate referred to in the second paragraph to a corporation unless, at the time the certificate is to be issued, the exempt corporation certificate held by the corporation is still valid or the date of coming into force of its revocation is subsequent to the first day of the particular taxation year.

9.3. To benefit from a tax credit relating to the new economy, a corporation must obtain the following certificates from Investissement Québec:

(1) a certificate for carrying out an activity that relates to the new economy in a designated site (in this chapter referred to as a “specified corporation certificate”); and

(2) a certificate in respect of its activities that relate to the new economy, in relation to a designated site in which it carries on a business (in this chapter referred to as an “activities certificate”).

Depending on which tax credit relating to the new economy the corporation intends to benefit from, the corporation must obtain one or more of the following certificates from Investissement Québec:

(1) in the case of the tax credit on specified wages, a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as a “specified employee certificate”); and

(2) if the corporation carries on a business in a biotechnology development centre and the tax credit concerned is the tax credit relating to the acquisition or rental of property, a property certificate in respect of each property for which the corporation claims the tax credit.

The certificates referred to in the first paragraph must be obtained for each taxation year for which the corporation intends to claim a tax credit relating to the new economy. Similarly, the certificate referred to in subparagraph 1 of the second paragraph must be obtained for each taxation year for which the corporation intends to benefit from the tax credit in respect of wages that relates to the new economy.

However, Investissement Québec may not, for a particular taxation year, issue a certificate referred to in the first paragraph and subparagraph 1 of the second paragraph to a corporation that holds an exempt corporation certificate issued following an application filed on or before 11 June 2003 and, after that date, either was entitled to obtain a specified corporation certificate because of subparagraph f of the first paragraph of section 771.13 of the Taxation Act or elected to become a corporation holding such a certificate, unless

(1) a specified corporation certificate was issued to the corporation for the preceding taxation year that is the particular year referred to in the seventh paragraph of section 9.25 or the year for which it made the election, as the case may be;

(2) a specified corporation certificate was issued to the corporation for each taxation year that is between that preceding year and the particular year; and

(3) at the time the certificates are to be issued for the particular year, none of the following certificates have been revoked:

(a) the exempt corporation certificate; and

(b) the certificates referred to in subparagraphs 1 and 2.

Similarly, Investissement Québec may not, for a particular taxation year, issue a certificate referred to in the first paragraph and subparagraph 1 of the second paragraph to a corporation that is not referred to in the fourth paragraph, unless

(1) a specified corporation certificate was issued to the corporation for the most recent preceding taxation year for which the corporation filed a written application for that purpose before 12 June 2003;

(2) a specified corporation certificate was issued to the corporation for each taxation year that is between that preceding year and the particular year; and

(3) at the time the certificates are to be issued for the particular year, none of the certificates referred to in subparagraphs 1 and 2 have been revoked.

If, at a particular time, Investissement Québec revokes the exempt corporation certificate issued to the corporation referred to in the fourth paragraph, any certificate referred to in the first paragraph and subparagraph 1 of the second paragraph issued to the corporation for a taxation year following an application filed after 11 June 2003 is deemed to be revoked by Investissement Québec at that time. If, at a particular time, Investissement Québec revokes a specified corporation certificate issued to the corporation referred to in the fourth or fifth paragraph for a given taxation year that, if the corporation is referred to in the fifth paragraph, does not precede the taxation year referred to in subparagraph 1 of that paragraph, the same applies in respect of any certificate issued to the corporation for a taxation year following the given year. In such cases, the effective date of the deemed revocation is the date of coming into force of the certificate that is deemed to be revoked. Any specified employee certificate and any activities certificate issued for the given year are also deemed to be revoked by Investissement Québec at that time, except that the effective date of their deemed revocation is the date specified in the notice of revocation of the specified corporation certificate.

The revocation by Investissement Québec of the exempt corporation certificate issued to a corporation gives rise to the application of the presumption in the sixth paragraph only if the date on which the revocation becomes effective precedes the date of coming into force of the election referred to in the fourth paragraph.

If the corporation carries on a business in a biotechnology development centre, the sixth paragraph applies only in respect of a certificate issued to it for a taxation year that begins before 31 March 2004 whose date of coming into force precedes that date. The same applies to the fourth and fifth paragraphs, which only operate for the purposes of the sixth paragraph. However, when the sixth paragraph applies to a taxation year that includes 31 March 2004, it is to be read as follows:

“If, at a particular time, Investissement Québec revokes the exempt corporation certificate issued to the corporation referred to in the fourth paragraph, any certificate referred to in the first paragraph and subparagraph 1 of the second paragraph issued to the corporation for the taxation year that includes 31 March 2004 is deemed to be amended by Investissement Québec at that time to replace the date of its coming into force by 31 March 2004. If, at a particular time, Investissement Québec revokes a specified corporation certificate issued to the corporation referred to in the fourth or fifth paragraph for a given taxation year that, if the corporation is referred to in the fifth paragraph, does not precede the taxation year referred to in subparagraph 1 of that paragraph, the same applies in respect of any certificate issued to the corporation for the taxation year that is subsequent to the given year and includes 31 March 2004.”

To benefit from the tax credit relating to the rental of an eligible facility, the corporation carrying on a business in a biotechnology development centre must obtain from the person who owns the facility for which the corporation claims the tax credit a copy of the facility certificate that the person obtained from Investissement Québec in respect of the facility.

9.4. For the purpose of applying, for a particular taxation year, the fourth or fifth paragraph of section 9.3 in respect of a particular corporation resulting from a corporate reorganization involving at least one other corporation that held a valid specified corporation certificate for its taxation year that ended immediately before the time of the reorganization or included that time (in this section and in section 9.25 referred to as the “reorganization year”), one or more of the following presumptions apply, as the case may be:

(1) where the other corporation or, if there are more than one, any of the other corporations is referred to in the fourth paragraph of section 9.3 or is deemed to hold an exempt corporation certificate because of the application of this subparagraph, the exempt corporation certificate held or deemed to be held by that corporation is, subject to the third paragraph, deemed to be held by the particular corporation, and each of the specified corporation certificates that were issued to it or are deemed to have been issued to it because of the application of this subparagraph is, subject to the third paragraph, deemed to have been issued to the particular corporation;

(2) where subparagraph 1 does not apply in respect of the other corporation or, if there are more than one, in respect of any of the other corporations, any specified corporation certificate that was issued to the corporation for any of its taxation years that is the reorganization year, the year referred to in subparagraph 1 of the fifth paragraph of section 9.3 or a year between those two taxation years, or that is deemed to have been issued to the corporation for such a year because of the application of this subparagraph, is, subject to the third paragraph, deemed to have been issued to the particular corporation for the same taxation year.

The first paragraph is deemed to have applied before 1 January 2011 in respect of any other corporation resulting from a corporate reorganization, if a specified corporation certificate was issued to that other corporation before that date.

If the exempt corporation certificate held by a given corporation, or a specified corporation certificate issued to it that would otherwise be referred to in the first paragraph is revoked by Investissement Québec, one of the following rules applies, as the case may be:

(1) in the case of the revocation of the exempt corporation certificate, neither that certificate nor any of the specified corporation certificates issued to the given corporation is deemed to be held by, or to have been issued to, the particular corporation under subparagraph 1 of the first paragraph;

(2) in the case of the revocation of a specified corporation certificate referred to in subparagraph 1 of the first paragraph, neither the exempt corporation certificate held or deemed to be held by the given corporation, nor any of the specified corporation certificates that were issued or are deemed to have been issued to it is deemed to be held by, or to have been issued to, the particular corporation under that subparagraph 1;

(3) in the case of the revocation of a specified corporation certificate referred to in subparagraph 2 of the first paragraph, none of the specified corporation certificates that were issued or are deemed to have been issued to the given corporation are deemed to have been issued to the particular corporation under that subparagraph 2.

However, the revocation by Investissement Québec of the exempt corporation certificate held by a given corporation gives rise to the application of the third paragraph only if the effective date of the revocation precedes the date of the acquisition of control referred to in the seventh paragraph of section 9.25 or before the date of coming into force of the election referred to in the fourth paragraph of section 9.3.

If, at a particular time, because of the application of the third paragraph, the particular corporation can no longer meet, for a particular taxation year, neither the conditions of subparagraphs 1 and 2 of the fourth paragraph of section 9.3 nor the conditions of subparagraphs 1 and 2 of the fifth paragraph of that section, any certificate described in the first paragraph of section 9.3 or in subparagraph 1 of the second paragraph of that section that was issued to it 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.

In this section and in section 9.25, “corporate reorganization” means

(1) an amalgamation of corporations;

(2) the winding-up of a wholly-owned subsidiary into its parent; or

(3) a reorganization in the course of which a corporation transfers to another corporation all of its activities referred to in the unrevoked activities certificate issued to the corporation for the taxation year that includes the time of the transfer, which time is considered to be the time of the reorganization, provided that all the issued shares of each class of shares of the capital stock of each of the two corporations that are parties to the transfer are owned by the same person or are owned by the same group of persons and are distributed among its members in such a manner that the proportion of issued shares of any class of shares of the capital stock of either of the two corporations that are owned by each member is identical to the proportion of issued shares of the corresponding class of shares of the capital stock of the other corporation that are owned by that member.

For the purposes of subparagraph 2 of the sixth paragraph, a corporation is a wholly-owned subsidiary of another corporation (in this section referred to as the “parent”), if at least 90% of all the issued shares of each class of shares of its capital stock are owned by the parent.

For the purposes of this section and of section 9.25, either the parent or the other corporation referred to in subparagraph 3 of the sixth paragraph is considered to be the corporation resulting from a corporate reorganization, depending on whether the reorganization is described in subparagraph 2 or 3 of that sixth paragraph.

The specified corporation certificate held for the reorganization year by the corporation that transferred all its activities referred to in the valid activities certificate it holds for the same year is deemed to be revoked by Investissement Québec as of the time of the reorganization. However, this presumption does not apply in respect of the third paragraph.

DIVISION II

DESIGNATION OF QUALIFIED CENTRE OR DESIGNATED SITE

9.5. Subject to the second paragraph, Investissement Québec may designate a building or part of a building as forming part of one of the following centres, provided that it is located at the address or at one of the addresses mentioned in the third paragraph for each of those centres:

(1) the Centre de développement des biotechnologies de Laval;

(2) the Centre de développement des biotechnologies de Lévis;

(3) the Centre de développement des biotechnologies de Saint-Hyacinthe; and

(4) the Centre de développement des biotechnologies de Sherbrooke.

Investissement Québec may determine the maximum area of a biotechnology development centre. However, the total area of all the centres may not exceed 29,120 m2 at any time.

The address or addresses of the biotechnology development centres are:

(1) for the centre in Laval, 500, boulevard Cartier Ouest;

(2) for the centre in Lévis, 205, route Monseigneur-Bourget;

(3) for the centre in Saint-Hyacinthe, 3405, rue Casavant Ouest and 4375, avenue Beaudry; and

(4) for the centre in Sherbrooke, 3201, rue Jean-Mignault and 1580, rue Ida-Métivier.

9.6. Investissement Québec may designate a building or part of a building as forming part of a new economy centre. However, the designated maximum area may not exceed 130,000 m2 for the whole of Québec at any time.

The following, listed by administrative region, are the new economy centres that have been designated:

(1) for the Bas-Saint-Laurent region,

(a) the Centre de la nouvelle économie de La Pocatière,

(b) the Centre de la nouvelle économie de Matane,

(c) the Centre de la nouvelle économie de Rimouski, and

(d) the Centre de la nouvelle économie de Rivière-du-Loup;

(2) for the Saguenay–Lac-Saint-Jean region,

(a) the Centre de la nouvelle économie d’Alma,

(b) the Centre de la nouvelle économie de Chicoutimi,

(c) the Centre de la nouvelle économie de Jonquière,

(d) the Centre de la nouvelle économie de La Baie, and

(e) the Centre de la nouvelle économie de Saint-Félicien;

(3) for the Capitale-Nationale region, the Centre de la nouvelle économie de Pont-Rouge;

(4) for the Mauricie region,

(a) the Centre de la nouvelle économie de Grand-Mère,

(b) the Centre de la nouvelle économie de Shawinigan, and

(c) the Centre de la nouvelle économie de Trois-Rivières;

(5) for the Abitibi-Témiscamingue region, the Centre de la nouvelle économie de Rouyn-Noranda;

(6) for the Côte-Nord region,

(a) the Centre de la nouvelle économie de Baie-Comeau, and

(b) the Centre de la nouvelle économie de Sept-Îles;

(7) for the Gaspésie–Îles-de-la-Madeleine region,

(a) the Centre de la nouvelle économie de Caplan, and

(b) the Centre de la nouvelle économie de Gaspé;

(8) for the Chaudière-Appalaches region,

(a) the Centre de la nouvelle économie de Lévis,

(b) the Centre de la nouvelle économie de Saint-Georges, and

(c) the Centre de la nouvelle économie de Thetford Mines;

(9) for the Lanaudière region, the Centre de la nouvelle économie de Lachenaie;

(10) for the Laurentides region,

(a) the Centre de la nouvelle économie de Boisbriand,

(b) the Centre de la nouvelle économie de Lachute, and

(c) the Centre de la nouvelle économie de Sainte-Adèle;

(11) for the Montérégie region,

(a) the Centre de la nouvelle économie d’Acton Vale,

(b) the Centre de la nouvelle économie de Bromont,

(c) the Centre de la nouvelle économie de Longueuil,

(d) the Centre de la nouvelle économie de Mont-Saint-Hilaire,

(e) the Centre de la nouvelle économie de Saint-Hyacinthe,

(f) the Centre de la nouvelle économie de Saint-Jean-sur-Richelieu,

(g) the Centre de la nouvelle économie de Saint-Joseph-de-Sorel,

(h) the Centre de la nouvelle économie de Salaberry-de-Valleyfield, and

(i) the Centre de la nouvelle économie de Varennes; and

(12) for the Centre-du-Québec region,

(a) the Centre de la nouvelle économie de Bécancour,

(b) the Centre de la nouvelle économie de Drummondville,

(c) the Centre de la nouvelle économie de Sainte-Monique, and

(d) the Centre de la nouvelle économie de Victoriaville.

9.7. Investissement Québec may designate a building or part of a building as forming part of the Centre national des nouvelles technologies de Québec, provided that it is located at one of the addresses mentioned in the third paragraph. However, the designated maximum area may not exceed 47,900 m2 at any time.

For the purposes of the first paragraph, the 10,700-square-metre area that is attributable to the Centre de développement des technologies de l’information de Québec must not be taken into account in calculating the maximum area.

The addresses of the buildings or parts of a building that may form part of the Centre national des nouvelles technologies de Québec are the following:

(1) 350, 390, 410, 420, 570, 585, 600, 680, 750 and 820, boulevard Charest Est;

(2) 400, boulevard Jean-Lesage;

(3) 779, rue Saint-François;

(4) 335, 337, 575, 633, 683, 690, 726, 770 and 771, rue Saint-Joseph Est; and

(5) 330 and 390, rue Saint-Vallier Est.

9.8. Investissement Québec may, in relation to a designation provided for in this division, enter into an agreement with any person who owns a building included in whole or in part in a qualified centre or a designated site. It may also amend such an agreement. In addition, it is deemed to be a party to any such agreement to which the Minister of Finance is a party.

9.9. The power of Investissement Québec under this division to designate buildings or parts of a building as forming part of certain qualified centres or certain designated sites includes the power to cancel such a designation by Investissement Québec or by the Minister of Finance.

DIVISION III

EXEMPT CORPORATION CERTIFICATE

9.10. An exempt corporation certificate held by a corporation certifies that the business that the corporation declares it is carrying on is an innovative project carried out in a qualified centre.

If part of the corporation’s premises that are located in the qualified centre is not yet available for occupation, the corporation must establish to Investissement Québec’s satisfaction that it has entered into a lease to occupy that part of the premises at the earliest date possible. Once that fact is established, the corporation is deemed, for the purposes of the first paragraph, to carry out, in that part of the premises and throughout the period during which it may not occupy it, the portion of the innovative project the corporation carries out elsewhere in Québec.

The parameters provided for in this division are administered by Investissement Québec only within the scope of its powers of amendment and revocation.

9.11. To be considered an innovative project, a business must,

(1) if it is carried on in an information technology development centre or in a new economy centre, meet the following criteria:

(a) be a project in the information technology sector,

(b) include planned investigation for the purpose of acquiring new technical or scientific knowledge, or consist in work to translate research discoveries or other knowledge into applications, prior to commercial production, and

(c) have as purpose the development of a product, service or production or manufacturing process which, at the time the application for the exempt corporation certificate is filed,

i. does not exist in Québec in the form described in the business plan,

ii. has not generated income other than income incidental to its development, and

iii. is a product, service or process whose development requires specialized skills in an emerging sector; or

(2) if it is carried on in a biotechnology development centre, meet the following criteria:

(a) belong to any segment of the biotechnology sector, including human health, animal or plant agrobiotechnology, the environment, and human or animal nutrition,

(b) be in a start-up or development phase,

(c) have as purpose the discovery of a substance or the invention, improvement or development of a product, compound or process presenting a competitive advantage in Québec, and

(d) require specialized skills in a scientific or technological field whose development in Québec is considered strategic for research, development or valorization activities.

DIVISION IV

ELIGIBLE EMPLOYEE CERTIFICATE

9.12. An eligible employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

9.13. An individual may be recognized as an eligible employee of a corporation if

(1) the individual works full time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks;

(2) the individual’s work for the corporation allows him or her to acquire specialized skills in an emerging sector of activity;

(3) the individual performs his or her duties mainly in the qualified centre where the corporation carries on a business; and

(4) the individual is working exclusively or almost exclusively on an innovative project for which the corporation holds an exempt corporation certificate.

For the purposes of subparagraph 4 of the first paragraph, the time spent by an individual on the performance of administrative tasks is not considered to be spent on the innovative project.

In this section, “administrative tasks” include tasks relating to commercialization, accounting, communications, clerical support, human resources management, implementation of technology on a customer’s premises, contract solicitation, general, legal or financial services, and customer service.

9.14. For the purposes of subparagraph 3 of the first paragraph of section 9.13, an individual who works for a corporation is deemed to perform his or her duties in the qualified centre where the corporation carries on business during the period in which the individual receives refresher training outside the centre, provided all the conditions of that section are otherwise met and the individual receives his or her usual remuneration during that period.

If the qualified centre is a biotechnology development centre, the individual is deemed to perform his or her duties in the centre when using a person’s specialized facility, in relation to the centre, that the corporation is renting in the course of carrying on a business.

The individual is deemed to perform his or her duties in the qualified centre when performing them elsewhere in Québec because part of the corporation’s premises located in the centre is not available for occupation. In such a case, the presumption applies only for the period referred to in the second paragraph of section 9.10 and only if the evidence required by that paragraph is provided to Investissement Québec’s satisfaction.

9.15. The number of eligible employee certificates that Investissement Québec may issue to a corporation for a taxation year, in respect of a qualified centre where it carries on a business, may not exceed the result obtained by dividing the total area of the premises occupied by the corporation in the qualified centre by the area of the average reasonable space intended for the exclusive use of an individual recognized as an eligible employee of the corporation for the year and that is needed by that individual to perform his or her duties.

The area of the average reasonable space is assessed taking into account the nature of the duties performed and the proportion that, for the same work shift, each type of work station of the corporation for which an eligible employee certificate may be issued is of all such work stations.

9.16. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as an eligible employee of a corporation, consider that the individual continued to work and 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.

DIVISION V

PROPERTY CERTIFICATE

9.17. A property certificate certifies that the property referred to in the certificate is,

(1) where the certificate is issued to a corporation holding a specified corporation certificate and carrying on a business in a biotechnology development centre, a specialized property that relates to an activity related to biotechnologies mentioned in the valid activities certificate held by the corporation in relation to the centre; or

(2) where the certificate is held by a corporation which, at the time of the application for the certificate, held, or met the conditions to obtain, an exempt corporation certificate, a specialized property that relates to the innovative project carried out by the corporation.

If the certificate is described in subparagraph 2 of the first paragraph, Investissement Québec takes into account the criteria provided for in that subparagraph only in exercising its powers of amendment and revocation.

9.18. Investissement Québec may not issue a property certificate in respect of incorporeal property (other than specialized application software or system software), inventory, property consumed in connection with an activity related to biotechnologies, promotional material, furniture or general use equipment.

As regards a certificate described in subparagraph 2 of the first paragraph of section 9.17, the first paragraph applies only within the scope of the power of revocation of Investissement Québec. For that purpose, that paragraph is to be read as if “in connection with an activity related to biotechnologies” was replaced by “in connection with the carrying out of the innovative project”.

9.19. If a corporation holding a valid specified corporation certificate and carrying on business in a biotechnology development centre holds a property certificate described in subparagraph 2 of the first paragraph of section 9.17, what is certified in the certificate is deemed to remain valid if the property referred to in the certificate relates to an activity related to biotechnologies mentioned in the valid activities certificate held by the corporation in relation to the centre.

DIVISION VI

FACILITY CERTIFICATE

9.20. A facility certificate issued to a person certifies that the facility referred to in the certificate and owned by the person is recognized as an eligible facility in relation to a biotechnology development centre.

9.21. No facility certificate may be issued to a person in respect of a facility owned by the person unless the person submits to Investissement Québec, with the certificate application, a rate schedule specifying the various rental fees charged for using the facility.

A person who owns a facility and amends the related rate schedule must diligently submit the amended rate schedule to Investissement Québec. If the person fails to comply with this requirement, Investissement Québec may revoke the certificate issued to the person in respect of the facility as of the date on which the rate schedule is amended.

9.22. A facility may be recognized as an eligible facility in relation to a biotechnology development centre, if

(1) it is a facility described in section 9.23 in relation to the centre; and

(2) the rate schedule sent to Investissement Québec in respect of the facility provides for rental fees that are reasonable in the circumstances.

9.23. Only the following facilities may be recognized as eligible facilities in relation to a biotechnology development centre:

(1) a person’s facility that is set up by the person in the biotechnology development centre outside the premises occupied by a corporation holding a specified corporation certificate or an exempt corporation certificate, and comprises exclusively or almost exclusively properties each of which

(a) is a specialized property used in the field of biotechnology;

(b) before being placed in the biotechnology development centre, has not been used for any purpose, nor acquired to be used for a purpose other than its rental; and

(c) is intended to be rented on an ad hoc basis to two or more persons; and

(2) a facility used in the field of biotechnology that is,

(a) if the biotechnology development centre is the one in Laval,

i. a specialized facility of the Centre québécois d’innovation en biotechnologie that is located in that biotechnology development centre, or

ii. a specialized facility of the Institut national de la recherche scientifique (INRS) that is located in the Cité de la biotechnologie et de la santé humaine du Montréal Métropolitain;

(b) if the biotechnology development centre is the one in Lévis,

i. the chemistry and biology laboratories of the chemistry and biology department of the Cégep de Lévis-Lauzon that are located in Lévis, or

ii. a specialized facility of TRANS BIO TECH Centre collégial de transfert en biotechnologies that is located in Lévis;

(c) if the biotechnology development centre is the one in Saint-Hyacinthe,

i. a specialized facility of the Centre de recherche et de développement des aliments that is located in Saint-Hyacinthe,

ii. a specialized facility of Cintech agroalimentaire that is located in Saint-Hyacinthe, or

iii. a specialized facility of the Institut de biotechnologie vétérinaire et alimentaire (IBVA) that is located in Saint-Hyacinthe; or

(d) if the biotechnology development centre is the one in Sherbrooke,

i. a specialized facility of the Centre de recherche clinique of the Centre hospitalier universitaire de Sherbrooke that is located on the premises of the hospital centre, or

ii. a specialized facility of the faculty of medicine of the Université de Sherbrooke that is located on the Campus de la santé of the university.

For the purposes of this section, “Cité de la biotechnologie et de la santé humaine du Montréal métropolitain” means a site located in the territory of Ville de Laval and established by the Minister of Finance as the Cité de la biotechnologie et de la santé humaine du Montréal métropolitain.

9.24. The person who owns a facility and rents it to a corporation holding a valid exempt corporation certificate or a valid specified corporation certificate must give the corporation a copy of the facility certificate issued to the person in respect of the facility, as well as a copy of the current rate schedule in respect of the facility.

DIVISION VII

SPECIFIED CORPORATION CERTIFICATE

9.25. A particular specified corporation certificate issued to a corporation for a taxation year certifies that the corporation is carrying out in the year, in a designated site that is specified in the certificate, an activity that is listed in the activities certificate issued to it for the year in relation to the site.

If the corporation is a particular corporation referred to in the first paragraph of section 9.4 for the taxation year, the particular certificate must specify the time of the corporate reorganization, as well as the names of all other corporations holding a specified corporation certificate for the reorganization year which, at the time of issue, had not been revoked by Investissement Québec. It also specifies, if applicable, for each of the other corporations mentioned in the particular certificate which, for a preceding taxation year, was itself a particular corporation referred to in the first paragraph of section 9.4, both the time of the preceding reorganization from which it resulted and the names of all other corporations holding a specified corporation certificate for the year of that preceding reorganization which, at the time of issue, had not been revoked by Investissement Québec.

The particular certificate must also specify the date of coming into force of the specified corporation certificate issued to the corporation for the first taxation year in which it carried out, in a designated site, an activity listed in the activities certificate issued to it for the year in relation to the site. However, in the following circumstances, the date that must be specified in the particular certificate is,

(1) where the corporation is a particular corporation referred to in the first paragraph of section 9.4, the date that is the earliest among all dates each of which is the date of coming into force of the exempt corporation certificate held by another corporation whose name would be mentioned in the particular certificate if the second paragraph were read as follows, or, if the other corporation does not hold such a certificate, the date of the first specified corporation certificate issued to it:

“If the corporation is a particular corporation referred to in the first paragraph of section 9.4 for the taxation year, the particular certificate must specify the time of the corporate reorganization, as well as the names of all other corporations holding a specified corporation certificate for the reorganization year. It also specifies, if applicable, for each of the other corporations mentioned in the particular certificate which, for a preceding taxation year, was itself a particular corporation referred to in section 9.4, both the time of the preceding reorganization from which it resulted and the names of all other corporations holding a specified corporation certificate for the year of that preceding reorganization.” ; or

(2) if the corporation is referred to in the fourth paragraph of section 9.3 and is not a particular corporation referred to in the first paragraph of section 9.4, the date of coming into force of the exempt corporation certificate it holds.

If the corporation is carrying on a business in a biotechnology development centre, the particular certificate must specify the rate that, subject to subparagraphs b to d of the first paragraph of section 1029.8.36.0.22.1 of the Taxation Act, is applicable to the tax credit on specified wages. The rate specified is 30%, except in the circumstances described in the first or second paragraph of section 9.26, in which case the rate is 40%. In addition, if the corporation is a particular corporation referred to in the first paragraph of section 9.27, Investissement Québec must specify in the particular certificate, in support of the 40% rate, the information that would be required by the second paragraph if it were read as if the reference to section 9.4 was replaced, wherever it appears, by a reference to section 9.27.

If part of the corporation’s premises located in the designated site is not available for occupation, the corporation must establish to Investissement Québec’s satisfaction that it has entered into a lease to occupy that part of the premises at the earliest date possible. Once that fact is established, the corporation is deemed, for the purposes of the first paragraph, to carry out, in that part of the premises and throughout the period of the taxation year during which it may not occupy it, the activities that it is carrying out elsewhere in Québec and that are listed in the activities certificate issued to it for the year in relation to the site.

If, in a taxation year, a corporation carries on a business in more than one designated site and Investissement Québec issues a specified corporation certificate in respect of each of those sites to the corporation for the year, the certificates are deemed to be one and the same specified corporation certificate. For that purpose, the following rules apply in respect of the latter certificate:

(1) its date of coming into force is the date that is the earliest of the dates of coming into force of the certificates that form it; and

(2) it will be considered revoked only when all the certificates that form it are revoked.

A corporation holding an exempt corporation certificate must inform Investissement Québec diligently if, at a particular time in a particular taxation year, control of a corporation holding a specified corporation certificate is acquired, in accordance with subparagraph f of the first paragraph of section 771.13 of the Taxation Act, by the corporation, by a person or group of persons controlling it or by a group described in that subparagraph f to which the corporation belongs as a member or as a corporation controlled by one or more members of the group. In such a case, Investissement Québec must issue a specified corporation certificate for the year to the corporation and to any other corporation holding an exempt corporation certificate that is likewise part of the group, unless the corporation or any such other corporation has notified Investissement Québec that it elects to maintain its exempt corporation status despite the acquisition of control.

A particular corporation holding an exempt corporation certificate makes the election referred to in the fourth paragraph of section 9.3 or in the first paragraph of section 9.26, for a taxation year, by filing with Investissement Québec an application for a specified corporation certificate for the year.

9.26. A rate of 40% is specified in the specified corporation certificate issued for a particular taxation year to a corporation that carries on a business in a biotechnology development centre, holds an exempt corporation certificate issued to it following an application filed before 12 June 2003 and, after 30 March 2004, was entitled to obtain a specified corporation certificate because of subparagraph f of the first paragraph of section 771.13 of the Taxation Act or elected to become a corporation holding such a certificate, if

(1) a specified corporation certificate was issued to the corporation for the preceding taxation year that is the particular year referred to in the seventh paragraph of section 9.25 or the year for which it made the election;

(2) a specified corporation certificate was issued to the corporation for each taxation year that is between that preceding year and the particular year; and

(3) at the time the specified corporation certificate is to be issued for the particular year, none of the following certificates have been revoked:

(a) the exempt corporation certificate; and

(b) the certificates referred to in subparagraphs 1 and 2.

The 40% rate is also specified in the specified corporation certificate issued for a particular taxation year to a corporation that carries on a business in a biotechnology development centre, but to which the first paragraph does not apply, if

(1) a specified corporation certificate was issued to the corporation for the most recent preceding taxation year for which the corporation filed a written application for that purpose before 12 June 2003;

(2) a specified corporation certificate was issued to the corporation for each taxation year that is between that preceding year and the particular year; and

(3) at the time the specified corporation certificate is to be issued to the corporation for the particular year, none of the certificates referred to in subparagraphs 1 and 2 have been revoked.

If, at a particular time, Investissement Québec revokes the exempt corporation certificate issued to the corporation referred to in the first paragraph, any specified corporation certificate issued to the corporation is deemed to be amended by Investissement Québec at that time to replace the specified rate of 40% by a rate of 30%. If, at a particular time, Investissement Québec revokes a specified corporation certificate issued to the corporation referred to in the first or second paragraph for a given taxation year which, if the corporation is referred to in the second paragraph, does not precede the taxation year referred to in subparagraph 1 of that paragraph, the same applies to any specified corporation certificate issued to the corporation for a taxation year subsequent to the given year.

The revocation by Investissement Québec of the exempt corporation certificate issued to a corporation gives rise to the application of the presumption in the third paragraph only if the effective date of the revocation precedes the date of coming into force of the election referred to in the first paragraph.

9.27. For the purpose of applying, for a particular taxation year, the first or second paragraph of section 9.26 in respect of a particular corporation resulting from a corporate reorganization involving at least one other corporation that held a valid specified corporation certificate for its taxation year that ended immediately before the time of the reorganization or included that time (in this section and in section 9.25 referred to as the “reorganization year”), one or more of the following presumptions apply, as the case may be:

(1) where the other corporation or, if there are more than one, any of the other corporations is referred to in the first paragraph of section 9.26 or is deemed to hold an exempt corporation certificate because of the application of this subparagraph, the exempt corporation certificate held or deemed to be held by that corporation is, subject to the third paragraph, deemed to be held by the particular corporation, and each of the specified corporation certificates that were issued to it or are deemed to have been issued to it because of the application of this subparagraph is, subject to the third paragraph, deemed to have been issued to the particular corporation; or

(2) where subparagraph 1 does not apply in respect of the other corporation or, if there are more than one, in respect of any of the other corporations, any specified corporation certificate that was issued to the corporation for any of its taxation years that is the reorganization year, the year referred to in subparagraph 1 of the second paragraph of section 9.26 or a year between those two taxation years, or that is deemed to have been issued to the corporation for such a year because of the application of this subparagraph, is, subject to the third paragraph, deemed to have been issued to the particular corporation for the same taxation year.

The first paragraph is deemed to have applied before 1 January 2011 in respect of any other corporation resulting from a reorganization, if a specified corporation certificate was issued to that other corporation before that date.

If the exempt corporation certificate held by a given corporation, or a specified corporation certificate issued to it that would otherwise be referred to in the first paragraph is revoked by Investissement Québec, one of the following rules applies, as the case may be:

(1) in the case of the revocation of the exempt corporation certificate, neither that certificate nor any of the specified corporation certificates issued to the given corporation is deemed to be held by, or to have been issued to, the particular corporation under subparagraph 1 of the first paragraph;

(2) in the case of the revocation of a specified corporation certificate referred to in subparagraph 1 of the first paragraph, neither the exempt corporation certificate held or deemed to be held by the given corporation, nor any of the specified corporation certificates that were issued or are deemed to have been issued to it is deemed to be held by, or to have been issued to, the particular corporation under that subparagraph 1; or

(3) in the case of the revocation of a specified corporation certificate referred to in subparagraph 2 of the first paragraph, none of the specified corporation certificates that were issued or are deemed to have been issued to the given corporation are deemed to have been issued to the particular corporation under that subparagraph 2.

However, the revocation by Investissement Québec of the exempt corporation certificate held by a given corporation gives rise to the application of the third paragraph only if the effective date of the revocation precedes the date of the acquisition of control referred to in the seventh paragraph of section 9.25 or before the date of coming into force of the election referred to in the first paragraph of section 9.26.

If, at a particular time, because of the application of the third paragraph, the particular corporation can no longer meet, for a taxation year, neither the conditions of subparagraphs 1 and 2 of the first paragraph of section 9.26 nor the conditions of subparagraphs 1 and 2 of the second paragraph of that section, any specified corporation certificate that was issued to it is deemed to have been amended by Investissement Québec at that time to replace, in accordance with the third paragraph of section 9.26, the rate of 40% by a rate of 30%.

In this section, “corporate reorganization” means

(1) an amalgamation of corporations;

(2) the winding-up of a wholly-owned subsidiary into its parent; or

(3) a reorganization in the course of which a corporation transfers to another corporation all of its activities referred to in the unrevoked activities certificate issued to the corporation for the taxation year that includes the time of the transfer, which time is considered to be the time of the reorganization, provided that all the issued shares of each class of shares of the capital stock of each of the two corporations that are parties to the transfer are owned by the same person or are owned by the same group of persons and are distributed among its members in such a manner that the proportion of issued shares of any class of shares of the capital stock of either of the two corporations that are owned by each member is identical to the proportion of issued shares of the corresponding class of shares of the capital stock of the other corporation that are owned by that member.

For the purposes of subparagraph 2 of the sixth paragraph, a corporation is a wholly-owned subsidiary of another corporation (in this section referred to as the “parent”), if at least 90% of all the issued shares of each class of shares of its capital stock are owned by the parent.

For the purposes of this section, either the parent or the other corporation referred to in subparagraph 3 of the sixth paragraph is considered to be the corporation resulting from a corporate reorganization, depending on whether the reorganization is described in subparagraph 2 or 3 of that sixth paragraph.

The specified corporation certificate held for the reorganization year by the corporation that transferred all its activities referred to in the valid activities certificate it holds for the same year is deemed to be revoked by Investissement Québec as of the time of the reorganization. However, this presumption does not apply in respect of the third paragraph.

DIVISION VIII

ACTIVITIES CERTIFICATE

9.28. An activities certificate issued, for a taxation year, to a corporation carrying on a business in a designated site certifies that each of the activities mentioned in the certificate is recognized,

(1) if the designated site is a biotechnology development centre, as an activity related to biotechnologies;

(2) if the designated site is a new economy centre, as an activity related to the new economy; or

(3) if the designated site is the Centre national des nouvelles technologies de Québec or the Cité du multimédia, as an activity related to information technologies.

If the designated site is a biotechnology development centre and the corporation does not hold an exempt corporation certificate, the activities certificate also specifies, for the purpose of establishing the beginning of the period referred to in paragraph b or c of the definition of “eligibility period” in the first paragraph of section 1029.8.36.0.17 of the Taxation Act, the date of coming into force of the first specified corporation certificate issued to the corporation following an application filed after 30 March 2004.

9.29. Subject to section 9.32, an activity may be recognized as an activity related to biotechnologies if

(1) the activity is an innovative activity in the field of biotechnology; and

(2) the activity is related to

(a) human health,

(b) animal or plant agrobiotechnology,

(c) the environment, or

(d) human or animal nutrition.

9.30. Subject to section 9.32, an activity may be recognized as an activity related to the new economy if

(1) the activity is an innovative activity; and

(2) the activity is carried out in any of the following sectors:

(a) information technologies, including electronic data processing, telecommunications, geomatics, measurement and control instrumentation, multimedia and consulting services,

(b) production technologies, including design and engineering, manufacturing and assembly, automated handling of materials and manufacturing information systems,

(c) biotechnologies, including human and animal health, farming, agri-food, forestry and the environment,

(d) materials technologies, including chemical and metallic materials, polymers and composite materials, and

(e) scientific and technological services, including engineering services, testing laboratories, scientific and technical consulting services and the design of computer systems.

9.31. Subject to section 9.32, an activity may be recognized as an activity related to information technologies if

(1) the activity is an innovative activity; and

(2) the activity is carried out in the sectors of information technology and communications, including electronic data processing, telecommunications, multimedia and consulting services.

9.32. The following activities may be recognized neither as activities related to biotechnologies, nor as activities related to the new economy or activities related to information technologies:

(1) the repair, maintenance and reconditioning of electronic or computer hardware;

(2) the manufacturing of machines, instruments, components, parts, hardware or equipment;

(3) the assembly of parts or components, such as the assembly of television sets, computer monitors, calculators or cash registers;

(4) audio or video signal distribution services via television broadcasting, telephony, cable broadcasting, satellites or other cellular networks;

(5) distribution services such as those of newspaper chains, periodicals, video clubs and television stations;

(6) the operation of radio or television broadcasting satellites, studios or networks;

(7) the operation of telephone services or electromagnetic telecommunications services, such as a call centre or a telephone network;

(8) activities related to print media, non-digital film, including post-production, or non-digital audiovisual production, including a television program;

(9) activities carried out by a primary supplier, in particular a museum, a library or an information bank;

(10) activities carried out by an Internet access provider;

(11) teleconferencing services;

(12) the publishing of books and the production of disks; and

(13) activities related to market analysis and market development, financial packaging, business plan preparation, capital property financing, advertising, promoting, manufacturing, processing or commercializing.

DIVISION IX

SPECIFIED EMPLOYEE CERTIFICATE

9.33. A specified employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized as a specified employee of the corporation for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

9.34. An individual may be recognized as a specified employee of a corporation if

(1) the individual works full time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks;

(2) the individual undertakes, supervises or directly supports, in a designated site where the corporation carries on a business, work relating to an activity of the corporation that is mentioned in the activities certificate issued to the corporation, in relation to the site, for the year for which the application for an employee certificate is filed; and

(3) the individual performs his or her duties exclusively or almost exclusively in the designated site.

9.35. For the purposes of subparagraph 3 of the first paragraph of section 9.34, an individual who works for a corporation is deemed to perform his or her duties in a designated site where the corporation carries on a business during the period in which the individual receives refresher training outside the site, provided all the conditions of that section are otherwise met and the individual receives his or her usual remuneration during that period.

An individual is also deemed to perform, in the designated site, the duties that the individual performs in a research centre equipped with specialized equipment or in a natural setting, if

(1) the research centre or natural setting is located neither in another establishment of the corporation, nor in the establishment of a client or of a person with whom the corporation is not dealing at arm’s length; and

(2) it would be unreasonable to require that those duties be performed in the designated site.

If the designated site is a biotechnology development centre, the individual is deemed to perform his or her duties in the centre when using a person’s specialized facility, in relation to the centre, that the corporation is renting in the course of carrying out an activity mentioned in the valid activities certificate it holds in relation to the centre.

The individual is also deemed to perform his or her duties in the designated site when performing them elsewhere in Québec because part of the corporation’s premises located in the site is not available for occupation. In such a case, the presumption applies only for the period referred to in the fifth paragraph of section 9.25 and only if the evidence required by that paragraph is provided to Investissement Québec’s satisfaction. The latter presumption also has effect for the purposes of subparagraph 2 of the first paragraph of section 9.34.

9.36. The number of specified employee certificates that Investissement Québec may issue to a corporation for a taxation year, in respect of a designated site where the corporation carries on a business, may not exceed the result obtained by dividing the total area of the premises occupied by the corporation in the designated site by the area of the average reasonable space that is intended for the exclusive use of an individual recognized as a specified employee of the corporation for the year and that is needed by that individual to perform his or her duties.

The area of the average reasonable space is assessed taking into account the nature of the duties performed and the proportion that, for the same work shift, each type of work station of the corporation for which a specified employee certificate may be issued is of all such work stations.

9.37. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as a specified employee of a corporation, consider that the individual continued to work and 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.

CHAPTER X

SECTORAL PARAMETERS OF TAX HOLIDAYS AND TAX CREDITS RELATING TO MONTRÉAL INTERNATIONAL TRADE ZONE AT MIRABEL

DIVISION I

INTERPRETATION AND GENERAL

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

“fiscal measure relating to the Montréal international trade zone at Mirabel” means any of the following fiscal measures from which a corporation to which the certificate referred to in the first paragraph of section 10.3 is or has been issued, or a corporation that is a member of a partnership to which such a certificate has been issued or, in the case of the measure described in paragraph 6, another person who is a member of such a partnership may benefit:

(1) the tax credit for wages;

(2) the tax credit for customs brokerage services;

(3) the tax credit for the acquisition costs or rental expenses of a property;

(4) the fiscal measure provided for in Title VII.2.2 of Book IV of Part I of the Taxation Act, which allows the corporation to deduct an amount in computing its taxable income, for a taxation year, under section 737.18.11 of that Act;

(5) the fiscal measure provided for in sections 1130, 1137 and 1138.2.1 of the Taxation Act, which allows the corporation to deduct an amount in computing its paid-up capital for a taxation year under paragraphs d and e of section 1137 of that Act; and

(6) the fiscal measure provided for in sections 33 and 34 of the Act respecting the Régie de l’assurance maladie du Québec, which allows the corporation or the other person to obtain a contribution exemption under subparagraph b of the seventh paragraph of section 34 of that Act;

“Montréal international trade zone at Mirabel” means the zone that consists of the lots of the official cadastre of Mirabel bearing numbers 1 554 289, 1 554 299, 1 555 365, 1 689 485, 1 689 486, 1 689 487, 1 689 505, 1 689 506, 1 689 507, 1 689 508, 1 689 509, 1 689 548, 1 689 549, 1 689 551, 1 689 552, 1 689 555, 1 689 780, 1 689 781, 1 689 783, 1 689 784, 1 689 785, 1 689 786, 1 689 787, 1 689 789, 1 689 790, 1 689 791, 1 689 793, 1 689 794, 1 689 795, 1 689 796, 1 689 797, 1 689 798, 1 689 799, 1 689 897, 1 689 898, 1 689 899, 1 689 900, 1 689 901, 1 689 902, 1 689 903, 1 689 904, 1 689 905, 1 689 906, 1 689 907, 1 689 908, 1 689 910, 1 689 911, 1 689 913, 1 689 981, 1 689 992, 1 690 004, 1 690 006, 1 690 007, 1 809 917, 1 809 918, 1 809 923, 2 362 199, 2 362 203, 2 362 326, 2 455 559, 2 455 561, 2 455 562, 2 455 563, 2 455 564, 2 455 565, 2 455 567 and 3 495 456;

“tax credit for customs brokerage services” means the fiscal measure provided for in Division II.6.0.5 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 credit for the acquisition costs or rental expenses of a property” means the fiscal measure provided for in Division II.6.0.6 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 credit for the construction, renovation or alteration of strategic buildings” means the fiscal measure provided for in Division II.6.0.7 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 credit for wages” means the fiscal measure provided for in Division II.6.0.4 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.

10.2. For the purposes of this Act and despite sections 1175.27, 1175.28.15 and 1175.28.17 of the Taxation Act, every person who is a member of a partnership that holds the certificate referred to in the first paragraph of section 10.3 is considered to be the person who benefits from, or avails himself, herself or itself of, the fiscal measure described in paragraph 6 of the definition of “fiscal measure relating to the Montréal international trade zone at Mirabel” in section 10.1, according to the agreed proportion in respect of the person for the partnership’s fiscal period that ends in the person’s taxation year for which the measure applies.

10.3. To benefit from a fiscal measure relating to the Montréal international trade zone at Mirabel, a corporation or, if it avails itself of the measure as a member of a partnership, the partnership must hold a valid certificate in respect of the business carried on in the zone (in this chapter referred to as a “business certificate”). The same applies if another person who is a member of the partnership intends to avail himself, herself or itself of the fiscal measure described in paragraph 6 of the definition of “fiscal measure relating to the Montréal international trade zone at Mirabel” in section 10.1.

Depending on which fiscal measure relating to the Montréal international trade zone at Mirabel the corporation or the partnership of which the corporation is a member intends to benefit from, the corporation or the partnership must obtain one or more of the following certificates from Investissement Québec:

(1) in the case of the tax credit for wages, a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as an “employee certificate”);

(2) in the case of the tax credit for customs brokerage services, a certificate in respect of each contract for which the corporation claims the tax credit (in this chapter referred to as a “contract certificate”); and

(3) in the case of the tax credit for the acquisition costs or rental expenses of a property, a certificate in respect of each property for which the corporation claims the tax credit (in this chapter referred to as a “property certificate”).

The certificates referred to in subparagraphs 1 and 2 of the second paragraph must be obtained, as the case may be, for each taxation year for which the corporation intends to benefit from the tax credit relating to the Montréal international trade zone at Mirabel to which that paragraph refers, or for each fiscal period of the partnership of which the corporation is a member that ends in such a taxation year.

However, Investissement Québec may not issue a particular certificate referred to in the second paragraph to a corporation or partnership, in relation to a business, unless the business certificate held by the corporation or the partnership in respect of the business is still valid on the date of coming into force of the particular certificate.

If, at a particular time, Investissement Québec revokes the business certificate held by the corporation or the partnership in respect of a business, any certificate referred to in the second paragraph that relates to the business and whose date of coming into force is subsequent to the effective date of the revocation 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. Any certificate referred to in the second paragraph that relates to the business and that is still valid on the effective date of the revocation of the business certificate is also deemed to be revoked by Investissement Québec at that particular time, except that the deemed revocation becomes effective on the latter date.

10.4. Despite the first paragraph of section 10.3, to benefit from a fiscal measure relating to the Montréal international trade zone at Mirabel, a particular corporation resulting from a corporate reorganization must obtain a business certificate from Investissement Québec in respect of a particular business. However, Investissement Québec may issue the certificate only if

(1) following the reorganization, the particular corporation carries on the particular business in the Montréal international trade zone at Mirabel;

(2) another corporation that was part of the reorganization held, immediately before the reorganization, an unrevoked business certificate that was issued to it, in respect of the particular business, either following an application filed before 12 June 2003 or, if the other corporation itself resulted from a reorganization, under this paragraph; and

(3) in the case of a reorganization referred to in subparagraph 3 of the fourth paragraph and where the particular business that was transferred to the particular corporation is only part of the business in respect of which the other corporation held a business certificate, the other corporation ceases as of the time of the transfer to carry on, in the Montréal international trade zone at Mirabel, the portion of that business that was not transferred.

The first paragraph is deemed to have applied before 1 January 2011 in respect of any corporation resulting from a corporate reorganization, if a business certificate was issued to it before that date in respect of the business carried on following the reorganization.

A particular business certificate issued to a particular corporation under the first paragraph is deemed to be revoked by Investissement Québec at a particular time if the business certificate that the other corporation held immediately before the reorganization from which it resulted is revoked by Investissement Québec at that time or is deemed to be revoked because of the application of this paragraph. The effective date of the deemed revocation is the date of coming into force of the particular certificate.

In this section and sections 10.6 and 10.20, “corporate reorganization” means

(1) an amalgamation of corporations;

(2) the winding-up of a wholly-owned subsidiary into its parent; or

(3) a reorganization in the course of which a corporation transfers to another corporation all or part of the activities of the particular business that are specified in the business certificate issued to the corporation that is valid immediately before the time of the transfer, which time is considered to be the time of the reorganization, provided that all the issued shares of each class of shares of the capital stock of each of the two corporations that are parties to the transfer are owned by the same person or are owned by the same group of persons and are distributed among its members in such a manner that the proportion of issued shares of any class of shares of the capital stock of either of the two corporations that are owned by each member is identical to the proportion of issued shares of the corresponding class of shares of the capital stock of the other corporation that are owned by the member.

For the purposes of subparagraph 2 of the fourth paragraph, a corporation is a wholly-owned subsidiary of another corporation (in this section referred to as the “parent”), if at least 90% of all the issued shares of each class of shares of its capital stock are owned by the parent.

For the purposes of this section and sections 10.6 and 10.20, the parent or the other corporation referred to in subparagraph 3 of the fourth paragraph is considered to be the corporation resulting from a corporate reorganization, depending on whether the reorganization is described in subparagraph 2 or 3 of that fourth paragraph.

The business certificate held by the corporation that transferred, in the course of a corporate reorganization described in subparagraph 3 of the fourth paragraph, all or part of the activities of the particular business that are described in the certificate is deemed to be revoked by Investissement Québec as of the time of the reorganization. However, this presumption does not apply in respect of the third paragraph.

10.5. A corporation which, for any taxation year, benefited from the tax credit for the construction, renovation or alteration of strategic buildings, in relation to a particular building, must, to avoid paying the special tax provided for in section 1129.4.30 of the Taxation Act, obtain from Investissement Québec a certificate in respect of the building (in this chapter referred to as a “building certificate”).

The certificate must be obtained for each of the nine taxation years following the taxation year that includes the date specified in the work completion certificate held by the corporation in relation to the particular building.

DIVISION II

BUSINESS CERTIFICATE

10.6. A particular business certificate issued to a corporation or a partnership, in relation to a particular business, certifies that all or substantially all of the activities of the business that the corporation or partnership carries on in the Montréal international trade zone at Mirabel are activities that are mentioned in the certificate. The certificate also certifies that those activities are recognized as eligible activities.

A particular certificate issued following an application filed before 12 June 2003 confirms the business plan enclosed with the application, which plan specifies, among other things, the particular sectors to which the activities of the particular business must belong.

In the case of a particular corporation referred to in the first paragraph of section 10.4, the particular certificate specifies the time of the corporate reorganization and the name of the other corporation holding, immediately before that time, a valid business certificate in respect of the particular business. If the other corporation also resulted from a corporate reorganization, the certificate specifies, for any other corporation mentioned in the particular certificate which, in the course of a preceding reorganization, was a corporation referred to in the first paragraph of section 10.4, both the time of the preceding reorganization from which it resulted and the name of the other corporation holding, immediately before that time, a valid business certificate in respect of the particular business. The particular certificate also specifies, for the purposes of the provisions of the Taxation Act that are listed in the fifth paragraph, as a deemed effective date, the date of coming into force of the business certificate issued, in respect of the particular business, to the other corporation or, if there are more than one, to the corporation among those other corporations that applied for the certificate before 12 June 2003. Lastly, for the purposes of the presumptions of the Taxation Act that are listed in the sixth paragraph, the latter certificate is deemed to have been issued to the particular corporation.

If an immovable or a part of immovable located in the Montréal international trade zone at Mirabel that the corporation or the partnership needs to carry on the particular business is not yet available for occupation, the corporation or partnership must give an undertaking to Investissement Québec that it will occupy the immovable or part of immovable at the earliest date possible. Once that undertaking has been given, the corporation or the partnership is deemed, for the purposes of this chapter, to carry on, in that immovable or part of immovable and throughout the period during which it may not occupy it, activities of the particular business that it carries on elsewhere in Québec.

The provisions of the Taxation Act to which the third paragraph refers are the following:

(1) the definition of “base period” in the first paragraph of section 737.18.6;

(2) paragraph b of the definition of “qualified wages” in the first paragraph of section 1029.8.36.0.38;

(3) paragraph b of the definition of “qualified brokerage expenditure” in the first paragraph of section 1029.8.36.0.55; and

(4) the definition of “qualified property” in the first paragraph of section 1029.8.36.0.72.

The presumptions of the Taxation Act to which the third paragraph refers are those set out in the following provisions of that Act:

(1) section 737.18.9.1; and

(2) the third paragraph of each of sections 1029.8.36.0.38, 1029.8.36.0.55 and 1029.8.36.0.72.

10.7. A business certificate issued to a corporation or a partnership in respect of a particular business whose activities are the expansion of the particular activities which, on the date it becomes effective, are carried on in Québec outside the Montréal international trade zone at Mirabel, is valid only for the period in which the corporation or partnership complies with its undertaking not to reduce the particular activities or move them inside the zone.

10.8. To be recognized as an eligible activity, an activity must be provided for in the business plan referred to in the second paragraph of section 10.6 and relate to one or more of the following sectors of activity:

(1) international logistics;

(2) aircraft maintenance and repair;

(3) training in the field of aviation; and

(4) minor processing.

An activity that is provided for in the business plan referred to in the second paragraph of section 10.6 may also be recognized as an eligible activity if, in the opinion of Investissement Québec, it is of special interest to Québec.

10.9. Subject to section 10.10, an activity relates to international logistics if it is closely related to the international or interprovincial distribution of goods. In this respect, for each class of goods, Québec must be neither the origin nor the destination of property representing more than 20% of the value of the goods included in that class. However, a more substantial part of the property of a class of goods may come from Québec or be distributed in Québec if such property is not otherwise distributed in Québec by other businesses.

10.10. The transportation activities of a corporation or partnership providing air, trucking or railway services are not considered to be activities that relate to international logistics, unless they consist in ground activities of an air carrier that are directly related to the transhipment or storage of goods.

10.11. The aircraft maintenance and repair sector includes activities relating to the maintenance and repair of navigation instruments and ground service equipment.

10.12. An activity relates to training in the field of aviation if it complements training activities that are offered in Québec outside the Montréal international trade zone at Mirabel or if it contributes mainly to the training of flight personnel or airport personnel that are not resident in Québec.

For the purposes of the first paragraph,

“airport personnel” includes firefighters, de-icing workers, air traffic controllers, investigators, flight safety managers and ramp agents;

“flight personnel” includes pilots, flight attendants and flight engineers.

10.13. A manufacturing or processing activity relates to minor processing if the total of the value added at the time of the manufacturing or processing and the cost of the components purchased in the Montréal international trade zone at Mirabel for that activity does not exceed half of the total value of the product manufactured or processed, and if the decision to establish, in the zone, a particular business of which the activity is a part is significantly motivated by one or more of the following factors:

(1) the proximity of an international airport;

(2) the presence of a free zone;

(3) easy access to air, road, rail or maritime transportation; and

(4) the availability of a sizable establishment area.

However, such a manufacturing or processing activity may not be recognized as an eligible activity unless it contributes to the development of facilities dedicated to airport purposes and to the economic development of Québec and is in keeping with the requirements of international trade agreements.

DIVISION III

EMPLOYEE CERTIFICATE

10.14. An employee certificate issued to a corporation or a partnership, in relation to a particular business, certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation or partnership for the taxation year or fiscal period for which the application for the certificate was made or for the part of the year or period specified in the certificate.

10.15. An individual may be recognized as an eligible employee of a corporation or a partnership, if

(1) the individual works full-time for the corporation or partnership, that is, at least 26 hours per week, for an expected minimum period of at least 40 weeks; and

(2) at least 75% of the individual’s duties with the corporation or partnership consist in work relating to an activity of a particular business (other than an activity that relates to minor processing) that is specified in the valid business certificate held by the corporation or partnership in respect of the business.

For the purposes of subparagraph 2 of the first paragraph, an individual’s administrative tasks are not to be considered as work relating to an activity specified in a business certificate.

In this section, “administrative tasks” include tasks relating to operations management, accounting, finances, legal affairs, public relations, communications, contract solicitation and human and physical resources management.

DIVISION IV

CONTRACT CERTIFICATE

10.16. A contract certificate issued to a corporation or a partnership, in relation to a particular business, certifies that the contract referred to in the certificate is recognized as an eligible contract for the taxation year of the corporation or the fiscal period of the partnership for which the application for the certificate was made. The contract certificate also lists the services rendered under the contract by a customs broker to the corporation in the year, or to the partnership in the period, that constitute customs brokerage services rendered in relation to the activities of the particular business that are specified in the valid business certificate held by the corporation or partnership in respect of the business.

10.17. A contract between a corporation or a partnership and a customs broker under which the customs broker undertakes to render customs brokerage services to the corporation or partnership, in relation to the activities of a particular business that are specified in the business certificate held by the corporation or partnership in respect of the business, is recognized as an eligible contract.

DIVISION V

PROPERTY CERTIFICATE

10.18. A property certificate issued to a corporation or a partnership certifies that the property referred to in the certificate is dedicated to the Montréal international trade zone at Mirabel. If the property is leased by the person or partnership, the certificate also specifies the eligible lease period of the property determined in accordance with the second paragraph.

The eligible lease period of a property is the lease period during which the total rent paid in respect of the property does not exceed 25% of the acquisition cost of an identical property.

10.19. A property is considered to be dedicated to the Montréal international trade zone at Mirabel if, within a reasonable time after its acquisition or after the date of the contract under which it is leased, it is used by the corporation or partnership only in the Montréal international trade zone at Mirabel and exclusively or almost exclusively to earn income from the activities of a particular business that are specified in the business certificate held by the corporation or partnership in respect of the business.

In the circumstances described in the fourth paragraph of section 10.6, a property is deemed to be used in the Montréal international trade zone at Mirabel for the period during which it is used by the corporation or partnership in Québec outside the zone, if

(1) during that period, it is used exclusively or almost exclusively to earn income from the activities specified in the business certificate held by the corporation or partnership in respect of the particular business; and

(2) it continues to be so used by the corporation or partnership in the carrying on of the particular business after the corporation or partnership has begun to occupy the immovable or the part of immovable, referred to in that fourth paragraph, that is located in the Montréal international trade zone at Mirabel.

10.20. Investissement Québec must revoke the property certificate issued to a corporation or a partnership, in respect of a property acquired or leased by it, if, at any time in the three-year period after the date on which the property began to be used by the corporation or partnership, the property ceases to be used by the corporation or partnership only in the Montréal international trade zone at Mirabel or exclusively or almost exclusively to earn income from the activities specified in the business certificate held by the corporation or partnership in respect of the particular business. The effective date of the revocation is the date of coming into force of the property certificate that is revoked.

If a property certificate has been issued to another corporation referred to in subparagraph 2 of the first paragraph of section 10.4 in relation to a particular business carried on by the other corporation, the particular corporation resulting from the corporate reorganization following which the particular corporation continues the carrying on of the particular business and the other corporation are deemed to be one and the same corporation in determining, for the purposes of this section and section 10.18, if the property has been used and, if so, to what end.

10.21. Investissement Québec may not issue a property certificate to a corporation or a partnership in respect of a property that is office furniture or general-use equipment or that is used by individuals holding administrative duties with the corporation or partnership. The same applies in respect of a property that is an aircraft, a vehicle or rolling stock, except in the case of equipment intended for the transhipment of goods or the handling of goods inside a warehouse, hangar or assembly shop.

DIVISION VI

BUILDING CERTIFICATE

10.22. A building certificate issued to a corporation certifies that, for the taxation year for which the application for the certificate was made, the building or the part of building that is referred to in the certificate is not used or intended to be used for residential purposes and that at least three quarters of the total space is used for the carrying on of one or more businesses recognized by Investissement Québec or is intended to be so used.

If at least three quarters of the total space of the building or of the part of building is occupied by the same corporation for the carrying on of a business recognized by Investissement Québec, the name of the corporation is also specified in the building certificate.

10.23. A business in whose respect an unrevoked business certificate is held is recognized by Investissement Québec. A business of a corporation may also be recognized by Investissement Québec if

(1) at the time the business begins to be carried on in the building or the part of building referred to in section 10.22, the business is not identical or similar to another business carried on in Québec at that time by a person other than the corporation;

(2) all or substantially all the activities of the business relate to one or more of the sectors of activity referred to in the first paragraph of section 10.8;

(3) the activities of the business are new activities for the corporation or constitute a significant expansion of a business already carried on by the corporation; and

(4) the activities of the business do not arise from the relocation of a business that was carried on in Québec outside the Montréal international trade zone at Mirabel.

CHAPTER XI

SECTORAL PARAMETERS OF TAX CREDIT FOR JOB CREATION IN RESOURCE REGIONS, IN ALUMINUM VALLEY AND IN GASPÉSIE AND CERTAIN MARITIME REGIONS OF QUÉBEC

DIVISION I

INTERPRETATION AND GENERAL

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

“base year” of a corporation, relating to the particular calendar year that ends in a taxation year for which the corporation claims the tax credit for job creation in certain regions of Québec, means, subject to the third paragraph, the calendar year that precedes the first calendar year covered by the first qualification certificate issued to the corporation that

(1) is valid at the beginning of the particular year; and

(2) either is referred to in the first paragraph of section 11.2 or, if that first calendar year precedes the year 2003, was issued for the purposes of any of the following divisions:

(a) Division II.6.6.2 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, in which case the qualification certificate is referred to in this chapter as an “initial qualification certificate” in relation to the Saguenay–Lac-Saint-Jean region;

(b) Division II.6.6.4 of that Chapter III.1, in which case the qualification certificate is referred to in this chapter as an “initial qualification certificate” in relation to the eligible regions; and

(c) Division II.6.6.6 of that Chapter III.1, in which case the qualification certificate is referred to in this chapter as an “initial qualification certificate” in relation to the resource regions;

“designated region” means

(1) a resource region;

(2) an eligible region; or

(3) the Saguenay–Lac-Saint-Jean region;

“eligible region” means

(1) the Bas-Saint-Laurent region;

(2) the Côte-Nord region; or

(3) the Gaspésie–Îles-de-la-Madeleine region;

“recognized business”, for a calendar year, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, means the set of activities carried on by a corporation in one or more resource regions, one or more eligible regions or in the Saguenay–Lac-Saint-Jean region, as the case may be, that are specified in a qualification certificate referred to in subparagraph 1 of the second paragraph of section 11.2 that is issued to the corporation for the calendar year;

“resource region” means

(1) any of the following regions or parts of a region:

(a) either the Bas-Saint-Laurent region or, if this definition applies to a calendar year subsequent to the year 2012, the part of that region that includes the territories of the regional county municipalities of La Matapédia, La Matanie and La Mitis,

(b) either the Saguenay–Lac-Saint-Jean region or, if this definition applies to a calendar year subsequent to the year 2012, the part of that region that includes the territories of the regional county municipalities of Maria-Chapdelaine, Le Fjord-du-Saguenay and Le Domaine-du-Roy,

(c) either the Mauricie region or, if this definition applies to a calendar year subsequent to the year 2012, the part of that region that includes the territories of the urban agglomeration of La Tuque, Municipalité régionale de comté de Mékinac and Ville de Shawinigan,

(d) the Abitibi-Témiscamingue region,

(e) the Côte-Nord region, and

(f) the Nord-du-Québec region; or

(2) any of the following regional county municipalities:

(a) Municipalité régionale de comté d’Antoine-Labelle,

(b) Municipalité régionale de comté de La Vallée-de-la-Gatineau, and

(c) Municipalité régionale de comté de Pontiac;

“tax credit for job creation in certain regions of Québec” means the fiscal measure provided for in Division II.6.6.6.1 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.

For the purposes of the definition of “base year” in the first paragraph, the following presumptions must be taken into consideration, as applicable:

(1) a qualification certificate issued to a corporation for a period beginning in the calendar year 2000 or 2001, in respect of a particular business that is recognized by Investissement Québec in relation to that calendar year and that was carried on by the corporation for the purposes of any of Divisions II.6.6.2, II.6.6.4 and II.6.6.6 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, is, if the corporation so elected and despite the revocation of the certificate by Investissement Québec at the corporation’s request, deemed valid, for the purpose of determining the corporation’s base year that relates to a subsequent calendar year that is covered, in whole or in part, by a qualification certificate referred to in the first paragraph of section 11.2 that is subsequently issued to the corporation in respect of activities recognized by Investissement Québec that are part of the business, or by a qualification certificate subsequently issued to the corporation, in relation to the business and for the purposes of that Division II.6.6.2, II.6.6.4 or II.6.6.6; and

(2) a qualification certificate referred to in the first paragraph of section 11.2 or issued for the purposes of any of Divisions II.6.6.2, II.6.6.4 and II.6.6.6 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act, revoked by Investissement Québec at the request of the corporation to which it has been issued, because of a major unforeseen event affecting the corporation in a particular calendar year, is deemed valid, for the purpose of determining the corporation’s base year that relates to a calendar year subsequent to the particular calendar year, if the corporation resumes the activities that were interrupted because of the major unforeseen event in a municipality or in another place that is more than 40 km away from the municipality or the place where the corporation used to carry on the activities.

However, the base year of a corporation that carried on, before 1 April 2008, a recognized business in relation to the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, is

(1) the calendar year that precedes the calendar year ending in the taxation year for which an election under the first paragraph of section 1029.8.36.72.82.3.1 of the Taxation Act was made for the first time by the corporation, if the corporation made the second election referred to in paragraph a of the definition of “base period” in the first paragraph of section 1029.8.36.72.82.1 of that Act; or

(2) the calendar year 2010, if the corporation made the election under the first paragraph of section 1029.8.36.72.82.3.1.1 of that Act.

11.2. To benefit from the tax credit for job creation in certain regions of Québec, a corporation that is carrying on activities in one or more designated regions must obtain a qualification certificate from Investissement Québec in relation to any set of activities which, according to the designated region or regions in which the corporation is carrying on the activities and the nature of the activities, is

(1) the set of activities that are carried on by the corporation in one or more resource regions in the first calendar year for which the application for the qualification certificate is filed and that may be recognized by Investissement Québec in respect of such a region, in which case the qualification certificate is referred to in this chapter as an “initial qualification certificate”, in relation to the resource regions;

(2) the set of activities that are carried on by the corporation in one or more eligible regions in the first calendar year for which the application for the qualification certificate is filed and that may be recognized by Investissement Québec in respect of such a region, in which case the qualification certificate is referred to in this chapter as an “initial qualification certificate”, in relation to the eligible regions; or

(3) the set of activities that are carried on by the corporation in the Saguenay–Lac-Saint-Jean region in the first calendar year for which the application for the qualification certificate is filed and that may be recognized by Investissement Québec in respect of that region, in which case the qualification certificate is referred to in this chapter as an “initial qualification certificate”, in relation to the Saguenay–Lac-Saint-Jean region.

To benefit from the tax credit, a corporation must also obtain the following documents from Investissement Québec:

(1) a qualification certificate (in this chapter referred to as a “business qualification certificate”) in respect of activities carried on by the corporation in one or more resource regions, one or more eligible regions or the Saguenay–Lac-Saint-Jean region and for which the corporation claims the tax credit; and

(2) a certificate (in this chapter referred to as an “employee certificate”) in respect of each individual who meets the requirements for recognition as an eligible employee of the corporation.

The documents referred to in the second paragraph must be obtained for each calendar year that ends in a taxation year for which the corporation intends to claim the tax credit for job creation in certain regions of Québec. The certificates referred to in subparagraph 2 of that paragraph must also be obtained for the base year that relates to such a calendar year.

However, Investissement Québec may not issue an initial qualification certificate to a corporation, in relation to the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, unless the first calendar year for which the application for the certificate is filed precedes the year 2016. Similarly, Investissement Québec may not issue an initial qualification certificate to a corporation in relation to the resource regions unless

(1) the corporation results from a corporate reorganization described in the fifth paragraph of section 11.4 in the course of which an unrevoked initial qualification certificate in relation to the resource regions is deemed to have been issued to the corporation under subparagraph 2 of the first paragraph of that section; or

(2) because of a major unforeseen event, an initial qualification certificate issued to the corporation in relation to the resource regions has been revoked by Investissement Québec at the corporation’s request and the corporation resumes the activities recognized by Investissement Québec in respect of such a region that were interrupted because of the event before the beginning of the third calendar year that follows the calendar year in which the activities were interrupted.

Similarly, Investissement Québec may not, for a particular calendar year, issue to a corporation a business qualification certificate in respect of the activities carried on by the corporation in one or more resource regions, one or more eligible regions or the Saguenay–Lac-Saint-Jean region unless the initial qualification certificate, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, issued to the corporation is valid for the particular year.

Investissement Québec is deemed to revoke the initial qualification certificate, in relation to the resource regions, that was issued to a corporation if the corporation makes an election under the first paragraph of section 1029.8.36.72.82.3.1.1 of the Taxation Act. The deemed revocation becomes effective on 1 January 2011.

If, at a particular time, Investissement Québec revokes an initial qualification certificate issued to a corporation, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, any business qualification certificate issued to the corporation in relation to such regions, for the particular calendar year that includes the effective date of the revocation or for a subsequent calendar year, 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 qualification certificate that is deemed to be revoked.

Investissement Québec may not issue a document referred to in the second paragraph to a corporation for a calendar year subsequent to the year 2015.

11.3. Investissement Québec may not issue an initial qualification certificate in relation to the set of activities carried on by a corporation in the eligible regions or the Saguenay–Lac-Saint-Jean region unless the corporation establishes to Investissement Québec’s satisfaction that at least three full-time jobs will be created within a reasonable time in the territory of one or more eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be.

For the purpose of determining the number of jobs created, any full-time, part-time or seasonal job created by a corporation in any establishment located in an eligible region or the Saguenay–Lac-Saint-Jean region, as the case may be, as well as any increase in the number of hours worked by employees of such an establishment, may be taken into account. The job or the increase in the number of hours worked is considered to be all or part of a full-time job, depending on the number of hours involved. In the case of an initial qualification certificate issued to a corporation in relation to the eligible regions, any such job that is created or any such increase that occurs in a period preceding the date of coming into force of the initial qualification certificate may also be taken into account if the corporation held, for that period, a valid initial qualification certificate within the meaning of Chapter XII.

11.4. If a particular corporation carries on a set of activities in one or more designated regions and resulted from a corporate reorganization involving another corporation that held, immediately before the reorganization, a valid business qualification certificate in relation to that set of activities, the following rules must be taken into consideration in this chapter:

(1) for the purpose of applying section 11.3 or the third paragraph of section 11.1 to the particular corporation, that corporation and the other corporation are deemed to be one and the same corporation;

(2) any unrevoked initial qualification certificate issued to the other corporation, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, or deemed to have been issued to it because of the application of this subparagraph is deemed to have been issued to the particular corporation; and

(3) any unrevoked employee certificate issued to the other corporation or deemed to have been issued to it because of the application of this subparagraph for its base year is deemed to have been issued to the particular corporation for the calendar year, unless the date of coming into force of the first initial qualification certificate issued to the latter corporation precedes the date of coming into force of the first initial qualification certificate issued to the other corporation.

However, the presumption set out in subparagraph 3 of the first paragraph does not apply in the case of a corporate reorganization that is described in subparagraph 3 of the fifth paragraph and the presumption set out in subparagraph 2 of the first paragraph applies to such a reorganization only for the purposes of subparagraph 1 of the fourth paragraph of section 11.2 and for the purpose of establishing whether an activity is referred to in the second paragraph of any of sections 11.7, 11.9 and 11.11.

If, immediately before a reorganization that occurs in the first 15 days of a particular calendar year, the other corporation did not hold, for the particular year, a business qualification certificate in respect of the set of activities referred to in the first paragraph that is transferred in the course of the reorganization, but held a valid initial qualification certificate, the unrevoked business qualification certificate issued to it, in respect of that set of activities, for the calendar year that precedes the particular year is deemed, for the purposes of the first paragraph and of subparagraph 3 of the fifth paragraph, to have been issued for the particular year and be valid immediately before the reorganization.

The first paragraph is deemed to have applied before 1 January 2011 in respect of any other corporation itself resulting from a corporate reorganization that occurred before that date in the circumstances described in that paragraph.

In this chapter, “corporate reorganization” means

(1) an amalgamation of corporations;

(2) the winding-up of a wholly-owned subsidiary into its parent; or

(3) a reorganization in the course of which a corporation transfers to another corporation all of its activities referred to in an unrevoked business qualification certificate issued to the corporation for the calendar year that includes the time of the transfer, which time is considered to be the time of the reorganization, provided that all the issued shares of each class of shares of the capital stock of each of the two corporations that are parties to the transfer are owned by the same person or are owned by the same group of persons and are distributed among its members in such a manner that the proportion of issued shares of any class of shares of the capital stock of either of the two corporations that are owned by each member is identical to the proportion of issued shares of the corresponding class of shares of the capital stock of the other corporation that are owned by the member.

For the purposes of subparagraph 2 of the definition of “corporate reorganization” in the fifth paragraph, a corporation is a wholly-owned subsidiary of another corporation (in this chapter referred to as the “parent”), if at least 90% of all the issued shares of each class of shares of its capital stock are owned by the parent.

For the purposes of this chapter, either the parent or the other corporation referred to in paragraph 3 of the definition of “corporate reorganization” in the fifth paragraph is considered to be the corporation resulting from a corporate reorganization, depending on whether the reorganization is described in paragraph 2 or 3 of that definition.

DIVISION II

INITIAL QUALIFICATION CERTIFICATE AND BUSINESS QUALIFICATION CERTIFICATE

11.5. An initial qualification certificate issued to a corporation, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, confirms that the activities specified in the certificate and carried on by the corporation in such a region, in the first calendar year referred to in the certificate, are activities recognized by Investissement Québec in respect of a resource region, an eligible region or the Saguenay–Lac-Saint-Jean region, as the case may be. However, that first calendar year may not precede the calendar year preceding the calendar year in which the corporation filed the application for the certificate with Investissement Québec.

If the initial qualification certificate is issued to a corporation resulting from a corporate reorganization described in subparagraph 1 or 2 of the fifth paragraph of section 11.4, it also sets out the activities specified in the initial qualification certificate, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, that was held, immediately before the reorganization, by the other corporation referred to in the first paragraph of that section. If, subsequently, the latter certificate is amended or revoked, Investissement Québec must make the resulting amendments to the initial qualification certificate issued to the corporation.

A corporation that files an application for an initial qualification certificate, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, is required to inform Investissement Québec of all the activities it carried on, in the first calendar year for which it makes the application, in one or more resource regions, one or more eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be.

If, as of a particular date, an activity may no longer be recognized in respect of a resource region under sections 11.7 to 11.10, in respect of an eligible region under sections 11.11 to 11.13 or in respect of the Saguenay–Lac-Saint-Jean region under sections 11.14 to 11.17, and a corporation holds an initial qualification certificate in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, in which the activity is specified, Investissement Québec must, at the corporation’s request, amend the qualification certificate to specify that the activity is recognized only for a period that ends immediately before the particular date.

If, as of a particular date, an activity may be recognized in respect of a resource region under sections 11.7 to 11.10, in respect of an eligible region under sections 11.11 to 11.13 or in respect of the Saguenay–Lac-Saint-Jean region under sections 11.14 to 11.17, and the corporation carried on the activity in such a region in the first calendar year covered by the initial qualification certificate it holds in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, Investissement Québec must amend the qualification certificate to specify that the activity is recognized as of the particular date.

11.6. A business qualification certificate issued to a corporation, for a calendar year, confirms that the activities specified in it and carried on by the corporation in one or more designated regions in the year constitute a business recognized by Investissement Québec for the year in respect of the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, depending on whether

(1) the designated regions are resource regions and the activities are recognized by Investissement Québec in respect of such a region;

(2) the designated regions are eligible regions and the activities are recognized by Investissement Québec in respect of such a region; or

(3) the designated region is the Saguenay–Lac-Saint-Jean region and the activities are recognized by Investissement Québec in respect of that region.

11.7. Subject to sections 11.9 and 11.10, an activity may be recognized by Investissement Québec in respect of a resource region if it is,

(1) in relation to the wood processing sector,

(a) an activity that consists in manufacturing or processing finished or semi-finished products from wood,

(b) an activity that consists in manufacturing or processing paper or paperboard products, or

(c) an activity that consists in manufacturing or processing crate components, in seasoning timber in a kiln or in planing timber in a plant;

(2) in relation to the metal processing sector, an activity that consists in manufacturing or processing finished or semi-finished products from metals;

(3) in relation to the non-metallic mineral processing sector, an activity that consists in manufacturing or processing finished or semi-finished products from non-metallic minerals, such as peat and slate;

(4) in relation to the food processing sector, an activity that consists in manufacturing or processing food products;

(5) in relation to the energy sector,

(a) an activity that consists in producing ecological non-conventional energy from the biomass or hydrogen, or

(b) an activity that consists in manufacturing products for the production or use of energy, namely,

i. components that directly produce energy or convert a form of energy into another, such as turbines and alternators, or

ii. industrial-use electrical materials and components that perform connection, commutation, relay or control functions, such as control panels, electric relays and switch cabinets; or

(6) in relation to other sectors,

(a) an activity that consists in reclaiming or recycling waste and residues resulting directly from the development or processing of natural resources,

(b) a fresh-water aquaculture activity,

(c) an activity that consists in manufacturing or processing finished or semi-finished products from gemstones or semi-precious stones, including an activity that consists in the setting of gemstones or semi-precious stones, or in jewellery making, or

(d) a printing or publishing activity, including an activity relating to typesetting, printing, collating, folding or bundling.

An activity that consists in manufacturing specialized equipment for logging operations, wood processing, paper or paperboard manufacturing, mining, metal processing, energy production or use, or fresh-water aquaculture, other than an activity described in the first paragraph, may be recognized by Investissement Québec in respect of a resource region if the activity is specified in an unrevoked initial qualification certificate issued to the corporation, in relation to the resource regions, following an application filed before 12 June 2003.

Any activity, other than a commercialization activity, that is related to an activity referred to in any subparagraph of the first paragraph or in the second paragraph, such as the technical design of products or production facilities, the receiving or storing of raw materials, or the assembling or handling of goods in process, is deemed to be referred to in that subparagraph or the second paragraph.

A design or engineering activity that is carried on by a corporation for the purpose of manufacturing or processing a property may be recognized by Investissement Québec in respect of a resource region even if the manufacturing or processing of the property is entrusted to a third party, provided that the manufacturing or processing activities are activities referred to in the first or second paragraph and that the corporation retains broad control over the manufacturing or processing process.

11.8. A commercialization activity that is carried on by a corporation in a particular calendar year may be recognized by Investissement Québec in respect of a resource region if it is incidental to an activity that is referred to in section 11.7 and carried on in such a region in the particular year by the corporation or a corporation associated with it, in the course of a recognized business, for that year, in relation to the resource regions.

For the purposes of this chapter, a commercialization activity referred to in the first paragraph is deemed to be carried on in a resource region.

11.9. None of the following activities may be recognized by Investissement Québec in respect of a resource region:

(1) an activity related to pulp, paper or paperboard manufacturing;

(2) an activity related to the primary processing of wood, metals or non-metallic minerals;

(3) an activity that consists in manufacturing or processing finished or semi-finished products from peat or slate and that is carried on by a corporation in the Bas-Saint-Laurent region or in the Côte-Nord region;

(4) an activity that consists in manufacturing or processing alcoholic beverages;

(5) a food manufacturing or processing activity that is carried on in restaurants, hotels, shopping centre fast-food outlets, supermarkets, grocery stores or other similar commercial establishments;

(6) a maintenance or repair activity;

(7) a scientific research and experimental development activity;

(8) an activity related to the sawing of logs or bolts to produce timber or similar products, such as boards, dimension lumber, poles and ties, an activity that takes place before logs are delivered to a sawmill or any other place for processing logs, or an activity related to the production of timber or similar products;

(9) an activity relating to the development of wildlife resources; and

(10) an installation activity, such as an activity involved in the installation of factory-built houses, steel joists, ventilation ducts, electrical systems or kitchen cabinets.

However, despite subparagraph 8 of the first paragraph, an activity of a corporation that relates to the production of timber or similar products and that is subsequent to the sawing of logs or bolts may be recognized by Investissement Québec in respect of a resource region if the activity is specified in the unrevoked initial qualification certificate, in relation to the resource regions, issued to the corporation following an application filed before 11 July 2002.

11.10. An activity that may be recognized by Investissement Québec in respect of an eligible region, otherwise than under subparagraph 4 or 5 of the first paragraph of section 11.11, or in respect of the Saguenay–Lac-Saint-Jean region may not be recognized in respect of a resource region.

11.11. Subject to section 11.13, an activity may be recognized by Investissement Québec in respect of an eligible region if it is

(1) an activity that consists in producing wind power or manufacturing wind turbines or their key components, in particular, towers, rotors or nacelles, unless the activity is carried on in the Côte-Nord region or the part of the Bas-Saint-Laurent region that is not included in the territory of the Municipalité régionale de comté de La Matanie;

(2) subject to the second paragraph, an activity that consists in manufacturing or processing finished or semi-finished products in the field of marine biotechnology;

(3) subject to the second paragraph, a mariculture activity, unless the activity is carried on in the Bas-Saint-Laurent region;

(4) an activity that consists in manufacturing or processing finished or semi-finished products from peat or slate, other than an activity related to the primary processing of those minerals, and that is carried on by a corporation that did not make the election under the first paragraph of section 1029.8.36.72.82.3.1.1 of the Taxation Act; or

(5) a processing or manufacturing activity that is not otherwise referred to in this paragraph, is included in the group described under code 31, 32 or 33 of the North American Industry Classification System (NAICS) Canada, as amended from time to time and published by Statistics Canada, and is carried on in the Gaspésie–Îles-de-la-Madeleine region.

However, subparagraph 2 or 3 of the first paragraph applies to an activity only if it is specified in a valid initial qualification certificate, in relation to the eligible regions, issued to the corporation for a period beginning in a calendar year that precedes the year 2004.

Any activity, other than a commercialization activity, that is related to an activity referred to in any subparagraph of the first paragraph, such as the technical design of products or production facilities, the receiving or storing of raw materials, or the assembling or handling of goods in process, is deemed to be referred to in that subparagraph.

A design or engineering activity that is carried on by a corporation for the purpose of manufacturing or processing a property may be recognized by Investissement Québec in respect of an eligible region even if the manufacturing or processing of the property is entrusted to a third party, provided that the manufacturing or processing activities are activities referred to in the first paragraph and that the corporation retains broad control over the manufacturing or processing process.

11.12. A commercialization activity that is carried on by a corporation in a particular calendar year may be recognized by Investissement Québec in respect of an eligible region if it is incidental to an activity that is referred to in section 11.11 and carried on in such a region in the particular year by the corporation or a corporation associated with it, in the course of a recognized business, for that year, in relation to the eligible regions.

For the purposes of this chapter, a commercialization activity referred to in the first paragraph is deemed to be carried on in an eligible region.

11.13. None of the following activities may be recognized by Investissement Québec in respect of an eligible region:

(1) an activity that consists in manufacturing or processing alcoholic beverages;

(2) a food manufacturing or processing activity that is carried on in restaurants, hotels, shopping centre fast-food outlets, supermarkets, grocery stores or other similar commercial establishments;

(3) a maintenance and repair activity;

(4) a scientific research and experimental development activity; and

(5) an installation activity, such as an activity involved in the installation of factory-built houses, steel joists, ventilation ducts, electrical systems or kitchen cabinets.

11.14. Subject to sections 11.16 and 11.17, an activity may be recognized by Investissement Québec in respect of the Saguenay–Lac-Saint-Jean region if it is

(1) an activity that consists in manufacturing finished or semi-finished products made from aluminum, provided the aluminum has already undergone primary processing; or

(2) an activity that consists in reclaiming or recycling waste and residues resulting directly from the processing of aluminum.

Any activity, other than a commercialization activity, that is related to an activity referred to in either of the subparagraphs of the first paragraph, such as the technical design of products or production facilities, the receiving or storing of raw materials, or the assembling or handling of goods in process, is deemed to be referred to in that subparagraph.

A design or engineering activity that is carried on by a corporation for the purpose of manufacturing or processing a property may be recognized by Investissement Québec in respect of the Saguenay–Lac-Saint-Jean region even if the manufacturing or processing of the property is entrusted to a third party, provided that the manufacturing or processing activities are activities referred to in the first paragraph and that the corporation retains broad control over the manufacturing or processing process.

11.15. A commercialization activity that is carried on by a corporation in a particular calendar year may be recognized by Investissement Québec in respect of the Saguenay–Lac-Saint-Jean region if it is incidental to an activity that is referred to in section 11.14 and carried on in that region in the particular year by the corporation or a corporation associated with it, in the course of a recognized business, for that year, in relation to the Saguenay–Lac-Saint-Jean region.

For the purposes of this chapter, a commercialization activity referred to in the first paragraph is deemed to be carried on in the Saguenay–Lac-Saint-Jean region.

11.16. None of the following activities may be recognized by Investissement Québec in respect of the Saguenay–Lac-Saint-Jean region:

(1) a maintenance and repair activity;

(2) a scientific research and experimental development activity; and

(3) an installation activity.

11.17. An activity that may be recognized by Investissement Québec in respect of an eligible region, otherwise than under subparagraph 5 of the first paragraph of section 11.11, may not be recognized in respect of the Saguenay–Lac-Saint-Jean region.

11.18. Investissement Québec may, at the request of a corporation, revoke the initial qualification certificate issued to the corporation, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, if, because of a major unforeseen event, the corporation must cease carrying on activities that are recognized by Investissement Québec in respect of such a region. The revocation becomes effective at the beginning of the calendar year following the calendar year in which the activities ceased.

A decrease in the corporation’s volume of business following the loss of a major client does not constitute a major unforeseen event.

DIVISION III

EMPLOYEE CERTIFICATE

11.19. An employee certificate issued to a corporation under this chapter certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation for pay periods that end in the calendar year for which the certificate was applied for. The certificate also specifies the number of such pay periods.

For its base year that relates to a particular calendar year, the corporation is required to apply to Investissement Québec for an employee certificate in respect of any individual working for it who, in accordance with section 11.20, may be recognized as an eligible employee of the corporation. A corporation resulting from a corporate reorganization described in subparagraph 1 or 2 of the fifth paragraph of section 11.4 is also required to apply, for the given calendar year that is its base year that relates to a particular calendar year, for an employee certificate in respect of any individual who may be so recognized and who worked in the given year for the other corporation referred to in the first paragraph of section 11.4, if the base year of the other corporation, immediately before the reorganization, was subsequent to the given calendar year.

If Investissement Québec amends or revokes one or more qualification certificates issued to a corporation for a particular calendar year each of which is either a business qualification certificate or a qualification certificate referred to in subparagraph 1 of the second paragraph of section 12.2, it must make consequential changes by amending or revoking, as applicable, any employee certificate that was issued to the corporation for the particular year and in respect of which activities that are specified in the qualification certificate or certificates so revoked or that are modified by the amendment to the qualification certificate or certificates were taken into account.

Similarly, if Investissement Québec amends or revokes one or more qualification certificates issued to a corporation and each of which is either an initial qualification certificate, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, as the case may be, or a qualification certificate referred to in the first paragraph of section 12.2, it must make consequential changes

(1) by amending or revoking, as applicable, any employee certificate that was issued to the corporation for its base year that relates to a particular calendar year and in respect of which activities that are specified in the qualification certificate or certificates so revoked or that are modified by the amendment to the qualification certificate or certificates were taken into account; or

(2) by issuing, if applicable, an employee certificate in respect of any individual who worked for the corporation in its base year that relates to a particular calendar year and that, because of the amendments made to the qualification certificate or certificates, may, in accordance with section 11.20, be recognized as an eligible employee of the corporation.

Investissement Québec must, at the corporation’s request, amend or revoke, as applicable, any employee certificate issued to it for the base year that relates to a calendar year subsequent to 2012, if the request is based on the fact that, from the calendar year 2013, the set of activities each of which is an activity recognized in respect of a resource region and carried on by the corporation in that base year in one or more of the following parts of regions is no longer taken into consideration:

(1) the part of the Bas-Saint-Laurent region not included in the territories of the regional county municipalities of La Matapédia, La Matanie and La Mitis;

(2) the part of the Saguenay–Lac-Saint-Jean region not included in the territories of the regional county municipalities of Maria-Chapdelaine, Le Fjord-du-Saguenay and Le Domaine-du-Roy; or

(3) the part of the Mauricie region not included in the territories of the urban agglomeration of La Tuque, Municipalité régionale de comté de Mékinac and Ville de Shawinigan.

If an employee certificate issued to a corporation for a base year of the corporation is amended or revoked because of the application of the fifth paragraph or of subparagraph 1 of the fourth paragraph, Investissement Québec must specify, in the amended certificate or in the notice of revocation, as the case may be, as of which calendar year that relates to that base year the amendment or revocation must be taken into consideration. The same applies if a new employee certificate is issued to the corporation for that base year because of the application of subparagraph 2 of the fourth paragraph.

11.20. An individual may be recognized as an eligible employee of a corporation, for a pay period that ends in a calendar year, if the proportion, expressed as a percentage, that the time spent by the individual during the period in undertaking, supervising or directly supporting the set of activities specified in one or more qualification certificates issued to the corporation for the year, each of which is either a business qualification certificate or a qualification certificate referred to in subparagraph 1 of the second paragraph of section 12.2, is of the time spent by the individual during the period in performing all his or her duties with the corporation is at least 75%.

If the calendar year is the base year that relates to a particular calendar year, the activities to be taken into consideration for the purpose of computing the proportion described in the first paragraph in respect of an individual are the following, not the activities referred to in that paragraph:

(1) the activities specified in any initial qualification certificate, in relation to the resource regions, the eligible regions or the Saguenay–Lac-Saint-Jean region, that was issued to the corporation and is still valid for the particular calendar year, if, according to the certificate, they are recognized for a period included in that particular year;

(2) the activities specified in a qualification certificate referred to in the first paragraph of section 12.2 that was issued to the corporation and is still valid for the particular calendar year, if, according to the certificate, they are recognized for a period included in that particular year and, if the calendar year is subsequent to the calendar year that is the corporation’s base period, within the meaning of the first paragraph of section 1029.8.36.72.82.13 of the Taxation Act, that is applicable to the particular calendar year, any other activity that either is specified in a qualification certificate referred to in subparagraph 1 of the second paragraph of section 12.2 that was issued to the corporation for the calendar year and that is not revoked, or would have been so specified in the certificate, or in such a certificate, if the corporation had made a request to that effect; and

(3) if the calendar year is referred to in the third paragraph of section 11.1, any other activity that either is specified in a business qualification certificate or in a qualification certificate referred to in subparagraph 1 of the second paragraph of section 12.2 that was issued to the corporation for the calendar year and is not revoked, or would have been so specified in the certificate, or in such a certificate, if the corporation had made a request to that effect.

However, if the calendar year to which subparagraph 3 of the second paragraph refers is the year 2010, that subparagraph is to be applied without reference, if applicable, to the business qualification certificate according to which the activities in respect of a resource region are recognized by Investissement Québec.

For the purposes of the first and second paragraphs, the administrative tasks of an individual may not be considered to relate to the activities that are specified in a qualification certificate referred to in those paragraphs.

In this section, “administrative tasks” include tasks relating to operations management, accounting, legal or financial services, communications, public relations, and human and physical resources management. They also include tasks relating to commercialization, other than those referred to in the first paragraph of any of sections 11.8, 11.12, 11.15 and 12.8.

11.21. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as an eligible employee, consider that the individual continued to work and 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.

CHAPTER XII

SECTORAL PARAMETERS OF TAX CREDIT TO PROMOTE EMPLOYMENT IN GASPÉSIE AND CERTAIN MARITIME REGIONS OF QUÉBEC

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible region” means

(1) the Bas-Saint-Laurent region;

(2) the Côte-Nord region; or

(3) the Gaspésie–Îles-de-la-Madeleine region;

“recognized business”, in relation to a calendar year, means the set of activities carried on by a corporation that are specified in a qualification certificate referred to in subparagraph 1 of the second paragraph of section 12.2 and issued to the corporation for the calendar year;

“tax credit to promote employment in the Gaspésie and certain maritime regions of Québec” means the fiscal measure provided for in Division II.6.6.6.2 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.

For the purposes of this chapter, a qualification certificate referred to in subparagraph 2 of the first paragraph of section 11.2 or issued for the purposes of Division II.6.6.4 of Chapter III.1 of Title III of Book IX of Part I of the Taxation Act and according to which one or more activities referred to in any of subparagraphs 3 and 5 to 7 of the first paragraph of section 12.7 are recognized by Investissement Québec is deemed to be a qualification certificate referred to in the first paragraph of section 12.2 in which those activities are the only ones that have been specified.

12.2. To benefit from the tax credit to promote employment in the Gaspésie and certain maritime regions of Québec, a corporation that is carrying on activities in one or more eligible regions must obtain a qualification certificate (in this chapter referred to as an “initial qualification certificate”) from Investissement Québec in relation to the set of activities that are carried on by the corporation in such a region in the first calendar year for which the application for the qualification certificate is filed and that may be recognized by Investissement Québec.

To benefit from the tax credit, a corporation must also obtain the following documents from Investissement Québec:

(1) a qualification certificate (in this chapter referred to as a “business qualification certificate”) in respect of activities that are carried on by the corporation in one or more eligible regions and for which the corporation claims the tax credit; and

(2) a certificate (in this chapter referred to as an “employee certificate”) in respect of each individual who meets the requirements for recognition as an eligible employee of the corporation.

The documents referred to in the second paragraph must be obtained for each calendar year that ends in a taxation year for which the corporation intends to claim the tax credit to promote employment in the Gaspésie and certain maritime regions of Québec.

However, Investissement Québec may not issue an initial qualification certificate to a corporation unless the first calendar year for which the application for the certificate is filed precedes the year 2026.

Similarly, Investissement Québec may not issue a business qualification certificate to a corporation for a particular calendar year in respect of the activities carried on by the corporation in one or more eligible regions unless the initial qualification certificate issued to the corporation is valid for the particular year.

If, at a particular time, Investissement Québec revokes an initial qualification certificate issued to a corporation, any business qualification certificate issued to the corporation for the particular calendar year that includes the effective date of the revocation or for a subsequent calendar year 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 qualification certificate that is deemed to be revoked.

Investissement Québec may not issue a document referred to in the second paragraph to a corporation for a calendar year subsequent to the year 2025.

12.3. Investissement Québec may issue an initial qualification certificate in relation to the set of activities carried on by a corporation in the eligible regions only if the corporation establishes to Investissement Québec’s satisfaction that at least three full-time jobs will be created within a reasonable time in such regions.

For the purpose of determining the number of jobs created, any full-time, part-time or seasonal job created by a corporation in any establishment located in an eligible region, as well as any increase in the number of hours worked by employees of such an establishment, may be taken into account. The job or the increase in the number of hours worked is considered to be all or part of a full-time job, depending on the number of hours involved. Any such job that is created or any such increase that occurs in a period preceding the date of coming into force of the initial qualification certificate may also be taken into account if the corporation held, for that period, a valid initial qualification certificate, in relation to the eligible regions, within the meaning of Chapter XI.

12.4. If a particular corporation carries on a set of activities in one or more eligible regions and resulted from a corporate reorganization involving another corporation that held, immediately before the reorganization, a valid business qualification certificate in relation to that set of activities, the following rules must be taken into consideration in this chapter:

(1) for the purpose of applying section 12.3 to the particular corporation, that corporation and the other corporation are deemed to be one and the same corporation; and

(2) any unrevoked initial qualification certificate issued to the other corporation or deemed to have been issued to it because of the application of this subparagraph is deemed to have been issued to the particular corporation.

However, the presumption set out in subparagraph 2 of the first paragraph does not apply in the case of a corporate reorganization that is described in subparagraph 3 of the fifth paragraph.

If, immediately before a reorganization that occurs in the first 15 days of a particular calendar year, the other corporation did not hold, for the particular year, a business qualification certificate in respect of the set of activities referred to in the first paragraph that is transferred in the course of the reorganization, but held a valid initial qualification certificate, the unrevoked business qualification certificate issued to it, in respect of that set of activities, for the calendar year that precedes the particular year is deemed, for the purposes of the first paragraph and of subparagraph 3 of the fifth paragraph, to have been issued for the particular year and be valid immediately before the reorganization.

The first paragraph is deemed to have applied before 1 January 2011 in respect of any other corporation itself resulting from a corporate reorganization that occurred before that date in the circumstances described in that paragraph.

In this chapter, “corporate reorganization” means

(1) an amalgamation of corporations;

(2) the winding-up of a wholly-owned subsidiary into its parent; or

(3) a reorganization in the course of which a corporation transfers to another corporation all of its activities referred to in an unrevoked business qualification certificate issued to the corporation for the calendar year including the time of the transfer, which time is considered to be the time of the reorganization, provided that all the issued shares of each class of shares of the capital stock of each of the two corporations that are parties to the transfer are owned by the same person or are owned by the same group of persons and are distributed among its members in such a manner that the proportion of issued shares of any class of shares of the capital stock of either of the two corporations that are owned by each member is identical to the proportion of issued shares of the corresponding class of shares of the capital stock of the other corporation that are owned by the member.

For the purposes of paragraph 2 of the definition of “corporate reorganization” in the fifth paragraph, a corporation is a wholly-owned subsidiary of another corporation (in this chapter referred to as the “parent”), if at least 90% of all the issued shares of each class of shares of its capital stock are owned by the parent.

For the purposes of this chapter, either the parent or the other corporation referred to in paragraph 3 of the definition of “corporate reorganization” in the fifth paragraph is considered to be the corporation resulting from a corporate reorganization, depending on whether the reorganization is described in paragraph 2 or 3 of that definition.

DIVISION II

INITIAL QUALIFICATION CERTIFICATE AND BUSINESS QUALIFICATION CERTIFICATE

12.5. An initial qualification certificate issued to a corporation confirms that the activities specified in the certificate and carried on by the corporation in an eligible region, in the first calendar year referred to in the certificate, are activities recognized by Investissement Québec under this chapter. However, that first calendar year may not precede the calendar year preceding the calendar year in which the corporation filed the application for the certificate with Investissement Québec.

If the initial qualification certificate is issued to a corporation resulting from a corporate reorganization described in subparagraph 1 or 2 of the fifth paragraph of section 12.4, it also sets out the activities specified in the initial qualification certificate that was held, immediately before the reorganization, by the other corporation referred to in the first paragraph of that section. If, subsequently, the latter certificate is amended or revoked, Investissement Québec must make the resulting amendments to the initial qualification certificate issued to the corporation.

A corporation that files an application for an initial qualification certificate is required to inform Investissement Québec of all the activities it carried on in one or more eligible regions in the first calendar year for which it makes the application.

If, as of a particular date, an activity may no longer be recognized under sections 12.7 to 12.9 and a corporation holds an initial qualification certificate in which the activity is specified, Investissement Québec must, at the corporation’s request, amend the qualification certificate to specify that the activity is recognized only for a period that ends immediately before the particular date.

If, as of a particular date, an activity may be recognized under sections 12.7 to 12.9 and the corporation carried on the activity in an eligible region in the first calendar year covered by the initial qualification certificate it holds, Investissement Québec must amend the qualification certificate to specify that the activity is recognized as of the particular date.

12.6. A business qualification certificate issued to a corporation, for a calendar year, specifies the activities carried on by the corporation in one or more eligible regions in the year that are recognized by Investissement Québec under this chapter. It confirms that the activities constitute a business that is recognized by Investissement Québec for the year for the purposes of the tax credit to promote employment in the Gaspésie and certain maritime regions of Québec.

12.7. Subject to section 12.9, an activity may be recognized by Investissement Québec if it is

(1) an activity that consists in manufacturing or processing finished or semi-finished products in the field of marine biotechnology;

(2) a mariculture activity; or

(3) an activity that consists in processing marine products, such as fish and seafood, except where it is carried on either in the part of the Bas-Saint-Laurent region that is not included in the territory of Municipalité régionale de comté de La Matanie, or in the Gaspésie–Îles-de-la-Madeleine region;

(4) a recreational activity intended particularly for tourists, an activity that consists in operating a tourist accommodation establishment described in subparagraph 2 of the third paragraph (including a food manufacturing or processing activity included in the tourist accommodation offer), an activity that consists in renting transportation equipment for recreational purposes or outdoor equipment, an activity relating to guided tours and boat excursions, or an activity relating to the operation of recreational facilities that foster tourism, that is carried on in the part of the Gaspésie–Îles-de-la-Madeleine region represented by the territory of the urban agglomeration of Îles-de-la- Madeleine;

(5) a processing or manufacturing activity that is not otherwise referred to in this paragraph, is included in the group described under code 31, 32 or 33 of the North American Industry Classification System (NAICS) Canada, as amended from time to time and published by Statistics Canada, and is carried on in the Gaspésie–Îles-de-la-Madeleine region;

(6) an activity that consists in manufacturing or processing finished or semi-finished products from peat or slate, other than an activity related to the primary processing of those minerals, and that is carried on by a corporation that did not make the election under the first paragraph of section 1029.8.36.72.82.3.1.1 of the Taxation Act; or

(7) an activity that consists in producing wind power or manufacturing wind turbines or their key components, in particular, towers, rotors or nacelles, unless the activity is carried on in the Côte-Nord region or the part of the Bas-Saint-Laurent region that is not included in the territory of the Municipalité régionale de comté de La Matanie.

Any activity, other than a commercialization activity, that is related to an activity referred to in any subparagraph of the first paragraph, such as the technical design of products or production facilities, the receiving or storing of raw materials, or the assembling or handling of goods in process, is deemed to be referred to in that subparagraph.

For the purposes of subparagraph 4 of the first paragraph,

(1) a recreational activity intended particularly for tourists includes equestrian activities, diving or nature interpretation activities;

(2) a tourist accommodation establishment means such an establishment in respect of which the operator holds a valid classification certificate issued under the Act respecting tourist accommodation establishments (chapter E-14.2), certifying that the establishment is part of a class of tourist accommodation establishments to which that Act applies;

(3) a food manufacturing or processing activity is included in a tourist accommodation offer only if it is incidental to the tourist accommodation offer and is intended exclusively for the clientele of the tourist accommodation establishment;

(4) an activity that consists in renting transportation equipment for recreational purposes includes renting boats, watercrafts and bicycles for such purposes;

(5) an activity relating to guided tours and boat excursions may be recognized only if it lasts less than 24 hours; and

(6) a recreational facility that fosters tourism includes a museum, a theatre, a performance hall, an interpretation centre or a health centre.

The following activities are not activities referred to in subparagraph 4 of the first paragraph:

(1) an activity that consists in renting automobiles;

(2) an activity relating to transportation services by plane, ferry or bus; and

(3) an activity relating to the operation of facilities such as cinemas, drive-ins, mini-golfs, arcades, bowling alleys, pool halls, bars or private clubs.

A health centre referred to in subparagraph 6 of the third paragraph means a relaxation centre, spa, Nordic bath, massage therapy centre or any other place offering similar services, but does not include a centre where health care is provided by health professionals such as physicians, chiropractors, dentists or nurses.

A design or engineering activity that is carried on by a corporation for the purpose of manufacturing or processing a property may be recognized by Investissement Québec even if the manufacturing or processing of the property is entrusted to a third party, provided that the manufacturing or processing activities are activities referred to in the first paragraph and that the corporation retains broad control over the manufacturing or processing process.

12.8. A commercialization activity that is carried on by a corporation in a particular calendar year may be recognized by Investissement Québec if the activity is incidental to an activity that is referred to in section 12.7 and carried on in an eligible region in the particular year by the corporation or a corporation associated with it, in the course of a recognized business in relation to that year.

For the purposes of this chapter, a commercialization activity referred to in the first paragraph is deemed to be carried on in an eligible region.

12.9. None of the following activities may be recognized by Investissement Québec:

(1) a food manufacturing or processing activity that is carried on in restaurants, hotels, shopping centre fast-food outlets, supermarkets, grocery stores or other similar commercial establishments, unless it is referred to in subparagraph 4 of the first paragraph of section 12.7;

(2) a scientific research and experimental development activity;

(3) an activity that consists in manufacturing or processing alcoholic beverages;

(4) a maintenance and repair activity; and

(5) an installation activity, such as an activity involved in the installation of factory-built houses, steel joists, ventilation ducts, electrical systems or kitchen cabinets.

12.10. Investissement Québec may, at the request of a corporation, revoke the initial qualification certificate issued to the corporation if, because of a major unforeseen event, the corporation must cease carrying on activities that are recognized by Investissement Québec for the purposes of this chapter. The revocation becomes effective at the beginning of the calendar year following the calendar year in which the activities ceased.

A decrease in the corporation’s volume of business following the loss of a major client does not constitute a major unforeseen event.

DIVISION III

EMPLOYEE CERTIFICATE

12.11. An employee certificate issued to a corporation under this chapter certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation for pay periods that end in the calendar year for which the certificate was applied for. The certificate also specifies the number of such pay periods.

If Investissement Québec amends or revokes one or more qualification certificates issued to a corporation for a particular calendar year each of which is either a business qualification certificate or a qualification certificate referred to in subparagraph 1 of the second paragraph of section 11.2, it must make consequential changes by amending or revoking, as applicable, any employee certificate that was issued to the corporation for the particular year and in respect of which activities that are specified in the qualification certificate or certificates so revoked or that are modified by amendment to the qualification certificate or certificates were taken into account.

12.12. An individual may be recognized as an eligible employee of a corporation, for a pay period that ends in a calendar year, if the proportion, expressed as a percentage, that the time spent by the individual during the period in undertaking, supervising or directly supporting the set of activities specified in one or more qualification certificates issued to the corporation for the year, each of which is either a business qualification certificate or a qualification certificate referred to in subparagraph 1 of the second paragraph of section 11.2, is of the time spent by the individual during the period in performing all his or her duties with the corporation is at least 75%.

For the purposes of the first paragraph, the administrative tasks of an individual may not be considered to relate to the activities that are specified in a qualification certificate referred to in that paragraph.

In this section, “administrative tasks” include tasks relating to operations management, accounting, legal or financial services, communications, public relations, and human and physical resources management. They also include the tasks relating to commercialization, other than those referred to in the first paragraph of any of sections 11.8, 11.12, 11.15 and 12.8.

12.13. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as an eligible employee, consider that the individual continued to work and 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.

CHAPTER XIII

SECTORAL PARAMETERS OF TAX CREDIT FOR DEVELOPMENT OF E-BUSINESS

DIVISION I

INTERPRETATION AND GENERAL

13.1. In this chapter, “tax credit for the development of e-business” means the fiscal measure provided for in Division II.6.0.1.9 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 development of e-business, a corporation must obtain the following certificates from Investissement Québec:

(1) a certificate in respect of the corporation (in this chapter referred to as a “corporation certificate”); and

(2) a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as an “employee certificate”).

The certificates must be obtained for each taxation year for which the corporation intends to claim the tax credit.

However, Investissement Québec may issue an employee certificate in respect of an individual to a corporation for a particular taxation year only if a corporation certificate is also issued to the corporation for the year and that certificate covers the whole year or, if applicable, the part of the year for which the individual meets the conditions of section 13.10.

If, at a particular time, Investissement Québec revokes a corporation certificate issued to a corporation for a taxation year, any employee certificate issued to the corporation for that year is also 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 employee certificate that is deemed to be revoked. If, in the circumstances described in the first or second paragraph of section 13.8, Investissement Québec changes the part of a taxation year that is specified in a corporation certificate, it must, if applicable, make consequential changes by amending or revoking any employee certificate issued to the corporation in relation to that year.

DIVISION II

CORPORATION CERTIFICATE

13.3. A corporation certificate issued to a corporation for a taxation year certifies that the corporation meets the following criteria for the year or, if the first or second paragraph of section 13.8 applies, for the part of the year specified in the certificate:

(1) the criteria relating to activities;

(2) the criterion relating to services provided; and

(3) the criterion relating to the maintenance of a minimum number of jobs.

The part of the taxation year that, if applicable, is specified in the certificate corresponds to a part of the year that either is described in subparagraph 1 or 2 of the first paragraph of section 13.8 or meets the conditions of subparagraphs 1 and 2 of the second paragraph of that section.

The certificate also specifies, if applicable,

(1) the proportion of the corporation’s gross revenue deriving from activities described in subparagraphs 5 and 7 of the first paragraph of section 13.5 that is attributable to applications developed by the corporation to be used exclusively outside Québec; and

(2) the proportion of the corporation’s gross revenue deriving from activities described in subparagraphs 8 and 9 of the first paragraph of section 13.5 that is ultimately attributable to applications developed, in the course of activities described in subparagraphs 5 and 7 of the first paragraph of section 13.5, to be used exclusively outside Québec.

13.4. The criteria relating to activities are met if the proportion of the corporation’s gross revenue deriving from eligible activities in the information technology sector is at least 75% and the proportion of its gross revenue deriving from activities referred to in subparagraphs 5 and 7 to 9 of the first paragraph of section 13.5 is at least 50%.

The criteria are considered to be met for a particular taxation year of the corporation if they are met for the corporation’s preceding taxation year or, if the first or second paragraph of section 13.8 applies to that preceding year, for a part of that preceding year that either is referred to in subparagraph 1 or 2 of that first paragraph or meets the conditions of subparagraphs 1 and 2 of that second paragraph.

However, if the preceding taxation year has less than 183 days, the second paragraph is to be read as follows:

“The criteria are considered to be met for a particular taxation year of the corporation if they are met for its most recent previous taxation year that has at least 183 days.”

Similarly, a part of a taxation year is taken into consideration for the purposes of the second paragraph only if it has at least 183 days.

13.5. The following activities are eligible activities of the information technology sector:

(1) computer and peripheral equipment manufacturing activities included in the group described under code 334110 of the North American Industry Classification System (NAICS) Canada, as amended from time to time and published by Statistics Canada, which code is in this paragraph referred to as the “NAICS code” ;

(2) radio and television broadcasting and wireless communications equipment manufacturing activities included in the group described under NAICS code 334220;

(2.1) semiconductor and other electronic component manufacturing activities included in the group described under NAICS code 334410;

(3) activities carried on by computer, computer peripheral and pre-packaged software wholesaler-distributors included in the group described under NAICS code 417310;

(4) activities carried on by computer and software stores included in the group described under NAICS code 443120;

(5) activities carried on by software publishers included in the group described under NAICS code 511210;

(6) activities consisting in data processing, hosting and related services included in the group described under NAICS code 51821;

(7) activities consisting in computer systems design and related services included in the group described under NAICS code 541510;

(8) subject to the second paragraph, activities consisting in temporary help services included in the group described under NAICS code 561320; and

(9) subject to the second paragraph, activities carried on by professional employer organizations included in the group described under NAICS code 561330.

However, the following activities do not constitute eligible activities of the information technology sector:

(1) any activity that, but for this subparagraph, would be described in subparagraph 8 or 9 of the first paragraph and that consists in providing employees who do not mainly carry on activities described in subparagraphs 1 to 7 of that paragraph; and

(2) any other activity that, but for this subparagraph, would be described in subparagraph 8 or 9 of the first paragraph, if, for the taxation year or the part of year concerned, the corporation’s gross revenue deriving from the set of its activities that would be described in those subparagraphs if no reference was made to this paragraph and no account was taken of the corporation’s employment placement agency and executive search activities included in the group described under NAICS code 561310, is equal to or greater than the corporation’s gross revenue deriving from the set of its activities described in subparagraphs 5 and 7 of the first paragraph.

In addition, for a taxation year of a corporation whose first day is prior to 30 October 2010 and that either begins or ends in that calendar year, the activities described in subparagraphs 8 and 9 of the first paragraph constitute eligible activities of the information technology sector only if the corporation made an election under section 13.14.

13.6. The criterion relating to services provided is met if at least 75% of the corporation’s gross revenue deriving from activities described in subparagraphs 5 and 7 to 9 of the first paragraph of section 13.5 is attributable to the following services:

(1) in relation to services provided by the corporation as part of activities described in those subparagraphs 5 and 7 (other than activities the results of which must be integrated into property intended for sale or whose purpose concerns the operation of such property), services

(a) whose ultimate beneficiary is a person or a partnership with whom the corporation is dealing at arm’s length, or

(b) that relate to an application developed by the corporation and used exclusively outside Québec; and

(2) in relation to services provided by the corporation to a particular person or a particular partnership as part of activities described in those subparagraphs 8 and 9, such services to the extent that the corporation’s gross revenue deriving from the activities described in those subparagraphs 8 and 9 that are related to those services

(a) ultimately relates to an application that results from activities described in those subparagraphs 5 and 7 (other than activities the results of which must be integrated into property intended for sale or whose purpose concerns the operation of such property) and that has been developed for the benefit of the particular person or particular partnership as part of activities described in those subparagraphs 8 and 9, or for the benefit of another person or partnership to whom the particular person or particular partnership provides services as part of activities described in those subparagraphs 8 and 9, and 

(b) is ultimately attributable to the following services provided as part of activities described in those subparagraphs 5 and 7 (other than activities the results of which must be integrated into property intended for sale or whose purpose concerns the operation of such property): 

i. services whose ultimate beneficiary is a person or partnership with whom the corporation is dealing at arm’s length, and

ii. services that relate to an application developed by the corporation, or by the particular person or particular partnership, as the case may be, and used exclusively outside Québec.

For the purposes of the first paragraph, services provided by a corporation to a member of a cooperative or of a federation of cooperatives are considered to be services provided to a person with whom the corporation is not dealing at arm’s length if the corporation is not dealing at arm’s length with the cooperative or federation of cooperatives.

For the purposes of subparagraph a of subparagraph 1 of the first paragraph, the particular person or partnership who directly or indirectly uses the applications developed by a corporation following the provision of services by the corporation to a person or a partnership as part of activities described in subparagraphs 5 and 7 of the first paragraph of section 13.5, not the customers of the particular person or partnership, is considered to be the ultimate beneficiary of those services.

For the purposes of subparagraph i of subparagraph b of subparagraph 2 of the first paragraph, the particular person or partnership who directly or indirectly uses the applications developed by a person or a partnership following the provision of services as part of activities described in subparagraphs 5 and 7 of the first paragraph of section 13.5, not the customers of the particular person or partnership, is considered to be the ultimate beneficiary of the services a corporation provides to a person or a partnership as part of activities described in subparagraphs 8 and 9 of the first paragraph of section 13.5.

For the purposes of this section and the third paragraph of section 13.3, Investissement Québec may consider that a corporation developed an application that is used exclusively outside Québec if it is of the opinion that the use of that application in Québec is insignificant in proportion to its overall use. To that end, Investissement Québec must take into account the impact that such a decision would likely have on the growth of activities in Québec that are related to the use of such an application and the impact of the increase of those activities on the competitiveness of businesses that carry on similar activities in Québec.

In this section, for the purpose of determining whether a corporation is considered not to be dealing at arm’s length with another person or partnership, in addition to subparagraph 3 of section 5 of this Act, the following rules apply:

(1) a corporation is deemed not to be dealing at arm’s length with another person or partnership if the corporation has, in respect of the other person or partnership, a significant influence deriving from a particular agreement; and

(2) if a corporation is not dealing at arm’s length with another person or partnership and the other person or partnership has, in respect of a third person or partnership, a significant influence deriving from a particular agreement, the corporation is deemed not to be dealing at arm’s length with the third person or partnership.

For the purposes of the sixth paragraph, a “significant influence” deriving from a particular agreement means an influence deriving from an agreement that is a franchise, licence, lease, distribution, supply or management agreement or other similar agreement or arrangement the main purpose of which is to govern the relationship between a particular person or partnership and another person or partnership with regard to the carrying on of the business of the other person or partnership, such that, were the influence exercised, the particular person or partnership would, in fact, control the other person or partnership.

13.7. The criterion relating to the maintenance of a minimum number of jobs is met if, throughout the taxation year or part of year concerned, there are at least six individuals, among the individuals working for the corporation, who meet the conditions of the first paragraph of section 13.10.

The criterion relating to the maintenance of a minimum number of jobs is deemed to be met if the corporation establishes to Investissement Québec’s satisfaction that it does not otherwise meet the criterion because of exceptional circumstances beyond the corporation’s control, such as the departure of employees and the impossibility of immediately filling the positions left vacant. Circumstances relating to a business start-up or a transfer of activities do not in themselves constitute exceptional circumstances.

Investissement Québec is justified in revoking the corporation certificate issued to a corporation because of the application of the presumption provided for in the second paragraph, if it ascertains that the corporation did not fill the vacant positions within a time that may be considered reasonable, particularly given the availability of skilled labour. In such a case, the effective date of the revocation is the date of coming into force of the corporation certificate.

13.8. If, at any time in a particular taxation year, activities until then carried on by a person or a partnership are the subject of a particular transfer to another person or partnership and, taking the whole particular year into consideration, it appears that a corporation involved in the transfer did not meet the criteria set out in sections 13.4 to 13.7, the criteria may, for the purpose of determining whether the corporation is entitled to obtain a corporation certificate for the particular year, be applied only to a part of the year that is described in either of the following subparagraphs:

(1) if the corporation is the transferor, the part of the particular year that begins at the same time as the particular year and that ends on the day preceding the day of the particular transfer; or

(2) if the corporation is the transferee, a part of the particular year that begins on the day of the particular transfer and that ends on the last day of that year or, if it is earlier, the day preceding the day of any other particular transfer of activities in which the corporation is involved.

If a corporation has, at any time, begun to carry on activities referred to in section 13.11 as part of a new business and, taking into consideration the whole particular taxation year included, at least in part, in the start-up period of the business, it appears that the corporation does not meet the criteria set out in sections 13.4 to 13.7, the criteria may, for the purpose of determining whether the corporation is entitled to obtain a corporation certificate for the particular year, be applied only to a part of the year that meets the following conditions:

(1) it is included in a portion of the particular year throughout which there are at least six individuals, among the individuals working for the corporation, who meet the conditions of the first paragraph of section 13.10; and

(2) it ends at the end of the particular year or, if it is earlier, on the day preceding the day of any particular transfer of activities in which the corporation is involved.

However, the second paragraph does not apply if a corporation certificate was issued to the corporation for a preceding taxation year.

For the purposes of this section, “particular transfer” of activities at any time in a taxation year of a corporation means a transfer, including a transfer deriving from the winding-up of a corporation, relating to activities which, at that time, would require the work of at least six individuals who meet the conditions of the first paragraph of section 13.10, if only those activities were taken into account.

DIVISION III

EMPLOYEE CERTIFICATE

13.9. An employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

13.10. An individual may be recognized as an eligible employee of a corporation, if

(1) the individual works full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks; and

(2) the individual spends at least 75% of working time performing duties that consist in undertaking, supervising or directly supporting eligible activities of the corporation or, if the individual’s services are lent to a client of the corporation as part of a temporary help agreement, eligible activities of the client.

For the purposes of subparagraph 2 of the first paragraph, an individual’s administrative tasks may not be considered to be part of duties that consist in undertaking, supervising or directly supporting eligible activities.

Where, for a taxation year of a corporation whose first day is prior to 30 October 2010 and that either begins or ends in that calendar year, the percentage of the working time spent by an individual in performing duties that consist in undertaking, supervising or directly supporting eligible activities must be determined in accordance with subparagraph 2 of the first paragraph, the activities of a client of the corporation must be taken into account only if the corporation made an election under section 13.14.

In this section, “administrative tasks” include tasks relating to operations management, accounting, finance, legal affairs, public relations, communications, contract solicitation, and human and physical resources management.

13.11. Subject to section 13.12, each of the following activities is an eligible activity:

(1) information technology consulting services relating to technology or systems development, or consulting services in e-business processes and solutions, to the extent that the consulting services relate to an activity described in any of subparagraphs 2 to 4;

(2) the development or integration of information systems or of technology infrastructures, as well as, to the extent that it is incidental to such a development or integration activity carried on by the corporation, any activity relating to the maintenance or evolution of such information systems or such technology infrastructures or to the design or development of e-commerce solutions allowing a monetary transaction between the person on behalf of whom the design or development is carried out and that person’s customers; and

(3) ( repealed);

(4) the development of security and identification services.

For the purposes of subparagraph 2 of the first paragraph, an activity relating to the maintenance or evolution of information systems or of technology infrastructures also includes any activity required for the proper operation of systems and infrastructures or required to resolve or prevent problems or incidents, provided that the activity is

(1) a technical corrective or preventive intervention that modifies one or more technical aspects of the components, including computerized processes; or

(2) a diagnostic activity, with remote access and control of systems and technology infrastructures, that leads directly or indirectly to a technical intervention referred to in subparagraph 1.

However, for the purpose of determining, for a taxation year of a corporation whose first day is prior to 30 October 2010 and that either begins or ends in that calendar year, whether an activity is an eligible activity, the second paragraph is taken into consideration only if the corporation made an election under section 13.14.

13.12. The following activities are not eligible activities:

(1) activities not primarily related to e-business;

(2) the operation of an e-business solution, such as the processing of electronic transactions through a transactional website;

(3) the management or operation of computer systems, applications or infrastructures stemming from e-business activities, namely,

(a) the management of e-business processing centres,

(b) the management of remote operations centres,

(c) the management of networks and systems, including systems monitoring,

(d) the operation of business process outsourcing services related to the operation of an e-business solution (back office), and

(e) the management of business processes associated with the internal operation of an e-business solution (internal back office);

(4) the operation of a customer relations centre, namely,

(a) the operation of an existing customer relations management service stemming from e-business activities, and

(b) the operation of a first-level administrative or technical assistance service for businesses and customers, related to the use of an e-business solution, such as taking calls or emails, user support in the use of systems, applications and features, monitoring and recording of requests, initial diagnosis and advice to resolve incidents or problems, referral of information concerning such incidents or problems to more specialized persons for resolution, and resetting passwords;

(5) hardware installation;

(6) training; and

(7) an activity relating to an information system concerning marketing designed to increase the visibility of a business and promote its goods and services with existing or potential customers.

For the purposes of subparagraph 1 of the first paragraph, a corporation’s activities carried out by an employee of the corporation are deemed not to be related to e-business if their results must be integrated into property intended for sale or their purpose concerns the operation of such property.

However, the first paragraph does not operate to exclude an activity described in subparagraph 2 of the first paragraph of section 13.11 because of the application of the second paragraph of that section.

Similarly, subparagraph 7 of the first paragraph does not operate to exclude an activity described in subparagraph 2 of the first paragraph of section 13.11 that relates to an information system including a component that partly concerns marketing.

In addition, for the purpose of determining, for a taxation year of a corporation whose first day is prior to 30 October 2010 and that either begins or ends in that calendar year, the activities that do not constitute eligible activities, the corporation must have made an election under section 13.14 in order for subparagraph a of subparagraph 4 of the first paragraph to be taken into consideration otherwise than as an example of activities consisting in the operation of a customer relations centre and for the following provisions of that first paragraph to be taken into account:

(1) subparagraphs a to e of subparagraph 3;

(2) subparagraph b of subparagraph 4; and

(3) subparagraphs 5 and 6.

13.13. If an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions of the first paragraph of section 13.10 for recognition as an eligible employee, 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. In such a case, the individual is deemed, for the purposes of the first paragraph of section 13.7 and subparagraph 1 of the second paragraph of section 13.8 to be included, throughout the period of absence, in the group of individuals who work for the corporation.

13.13.1. Investissement Québec may not issue an employee certificate in respect of an individual to a corporation for a taxation year or part of the taxation year, if a certificate in respect of the individual has been issued, for the same year or part of year, under Division III of Chapter XVII.

DIVISION IV

SPECIAL RULE

13.14. For a taxation year whose first day is prior to 30 October 2010 and that either begins or ends in that calendar year, a corporation may file an election in writing with Investissement Québec, on or before the last day of the 15th month following the end of that taxation year, to have the activities or provisions referred to in the third paragraph of sections 13.5 and 13.10 to 13.12 taken into consideration to the extent and for the purposes provided for in each of those paragraphs.

CHAPTER XIV

SECTORAL PARAMETERS OF TAX CREDIT FOR MARKET DIVERSIFICATION OF MANUFACTURING BUSINESSES

DIVISION I

INTERPRETATION AND GENERAL

14.1. In this chapter, “tax credit for the market diversification of manufacturing businesses” means the fiscal measure provided for in Division II.6.0.11 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 market diversification of manufacturing businesses, a corporation must obtain a certificate (in this chapter referred to as a “corporation certificate”). The certificate must be obtained for each taxation year for which the corporation intends to claim the tax credit.

DIVISION II

CORPORATION CERTIFICATE

14.3. A corporation certificate issued to a corporation for a particular taxation year certifies that at least 75% of the corporation’s gross revenue for the preceding taxation year, or for the taxation year that precedes that preceding year, is derived from eligible activities.

14.4. The following activities are eligible activities:

(1) structural wood product manufacturing activities covered by code 321215 of the North American Industry Classification System (NAICS) Canada, as amended from time to time and published by Statistics Canada, which code is in this section referred to as the “NAICS code”;

(2) activities carried on by particle board and fibreboard mills covered by NAICS code 321216;

(3) wood window and door manufacturing activities covered by NAICS code 321911;

(4) other millwork activities covered by NAICS code 321919;

(5) plastic pipe and pipe fitting manufacturing activities covered by NAICS code 326122;

(6) plastic window and door manufacturing activities covered by NAICS code 326196;

(7) rubber and plastic hose and belting manufacturing activities covered by NAICS code 326220;

(8) activities consisting in iron and steel pipes and tubes manufacturing from purchased steel covered by NAICS code 331210;

(9) prefabricated metal building and component manufacturing activities covered by NAICS code 332311;

(10) other plate work and fabricated structural product manufacturing activities covered by NAICS code 332319;

(11) metal window and door manufacturing activities covered by NAICS code 332321;

(12) power boiler and heat exchanger manufacturing activities covered by NAICS code 332410;

(13) metal tank manufacturing activities covered by NAICS code 332420;

(14) metal valve manufacturing activities covered by NAICS code 332910;

(15) ventilation, heating, air-conditioning and commercial refrigeration equipment manufacturing activities covered by NAICS code 3334;

(16) material handling equipment manufacturing activities covered by NAICS code 333920;

(17) communication and energy wire and cable manufacturing activities covered by NAICS code 335920; and

(18) wiring device manufacturing activities covered by NAICS code 335930.

CHAPTER XV

SECTORAL PARAMETERS OF TAX CREDIT FOR SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT WORK CARRIED ON BY A BIOPHARMACEUTICAL CORPORATION

DIVISION I

INTERPRETATION AND GENERAL

15.1. In this chapter, “tax credit for scientific research and experimental development work carried on by a biopharmaceutical corporation” means the fiscal measure provided for in sections 1029.7.0.1 and 1029.7.2.1 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 section 1029.7 for a taxation year.

15.2. To benefit from the tax credit for scientific research and experimental development work carried on by a biopharmaceutical corporation, a corporation must obtain from Investissement Québec a qualification certificate in respect of the activities it carries on or will carry on and a certificate in respect of the activities it carries on. However, an application for a qualification certificate cannot be granted by Investissement Québec if the application is filed after 3 June 2014.

The certificate must be obtained for each taxation year for which the corporation intends to avail itself of the tax credit for scientific research and experimental development work carried on by a biopharmaceutical corporation.However, no certificate may be issued to a corporation for a taxation year of the corporation that begins after 4 June 2014.

If, at a particular time, Investissement Québec revokes a qualification certificate issued to a corporation, any certificate issued to the corporation for the taxation year that includes the date on which the revocation becomes effective or for a subsequent taxation year 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

QUALIFICATION CERTIFICATE AND CERTIFICATE

15.3. A qualification certificate issued to a corporation under this chapter certifies that the activities specified in the qualification certificate and that the corporation carries on or will carry on are recognized as eligible activities.

15.4. The following human health-related activities are eligible activities:

(1) integrated innovative pharmaceutics (patented products) that consist in manufacturing and commercializing drugs as well as carrying out drug-related activities in the form of basic research, product development, clinical research or chemical synthesis;

(2) generic pharmaceutical manufacturing that consists in manufacturing and commercializing generic versions of prescription or non-prescription drugs whose patents have expired;

(3) contract pharmaceutical manufacturing that consists in manufacturing drugs for innovative pharmaceutical businesses, generic products businesses or large buyers;

(4) biotechnology that comprises

(a) therapeutic products, namely those that derive from drug research and development essentially targeting the small-molecule market rather than biological products, or that consist in devising methods of administering drugs in an organism or in developing cellular therapies,

(b) diagnostic products,

(c) biological processes, namely those that consist in producing drugs or vaccines, producing pharmaceutical proteins through the culture of genetically modified cells, developing genetically modified organisms for the production of drugs or in extracting active drug ingredients from natural sources, and

(d) pharmaceutical research, which consists in using genetic information to define targets for drug action or in offering products and services in genomics research; and

(5) contract research that consists in providing services in developing new drugs, such as bioequivalence studies, preclinical and clinical trials and the management of studies.

15.5. A certificate issued to a corporation certifies that the activities it carried on throughout the taxation year for which the application for the certificate was filed are activities mentioned in the qualification certificate the corporation has obtained.

15.6. Investissement Québec may issue a certificate to a corporation if, for the taxation year for which the application for the certificate is filed,

(1) the qualification certificate issued to the corporation was valid; and

(2) Investissement Québec is of the opinion that the activities specified in the corporation’s qualification certificate represented at least 75% of the activities it carried on throughout that taxation year.

For the purposes of subparagraph 2 of the first paragraph, Investissement Québec shall take into consideration the duties performed by all of the corporation’s employees and the activities that were carried on on its behalf in that taxation year.

15.7. Investissement Québec may, before issuing a qualification certificate or a certificate under this chapter or before amending or revoking such a document, obtain the advice of the Ministère de l’Enseignement supérieur, de la Recherche, de la Science et de la Technologie.

CHAPTER XVI

SECTORAL PARAMETERS OF TAX CREDIT RELATING TO INFORMATION TECHNOLOGY INTEGRATION

DIVISION I

INTERPRETATION AND GENERAL

16.1. In this chapter, “tax credit relating to information technology integration” means the fiscal measure provided for in Division II.6.14.2.2 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.

16.2. To benefit from the tax credit relating to information technology integration, a corporation or, if it avails itself of the measure as a member of a partnership, the partnership, must obtain from Investissement Québec a certificate in respect of each of the contracts for which it avails itself of the measure (in this chapter referred to as a “contract certificate”).

An application by a corporation or a partnership for a certificate in respect of a contract must be filed with Investissement Québec before the contract is entered into. However, Investissement Québec may, for reasons it considers reasonable, allow such an application to be filed after the contract is entered into.

Despite the second paragraph, Investissement Québec may not accept an application for a certificate, in respect of a contract, filed with Investissement Québec before 27 March 2015 or after 10 March 2020, unless

(a) the contract was the subject of a written prior agreement, made before 11 March 2020, that meets the conditions of section 16.4; and

(b) the application is filed before 1 July 2020.

DIVISION II

CONTRACT CERTIFICATE

16.3. A contract certificate that is issued to a corporation or a partnership certifies that the contract referred to in the certificate is recognized as an eligible information technology integration contract. It also lists the activities carried on under the contract that constitute the supply of a qualified management software package.

16.4. A contract to be entered into by a corporation or a partnership is recognized as an eligible information technology integration contract if it corresponds exactly to a written prior agreement, made after 26 March 2015 and before 11 March 2020, that

(1) is related to a preliminary analysis carried out by the corporation or partnership or on its behalf to draw up a plan describing its needs so that it may have access to a computerized infrastructure allowing a management software package to be used to optimize its business processes; and

(2) is entered into with a person dealing at arm’s length with the corporation or partnership who undertakes to provide the property and services relating to the supply of a qualified management software package himself, herself or itself.

16.5. The following activities, alone or in combination, constitute the supply of a qualified management software package:

(1) the sale or leasing of a management software package or of an open-source management software package, or of usage rights for such property, that mainly enables management of one or more of the following elements:

(a) all the operational processes of a business through the integration of all the functions of the business;

(b) the interactions of a business with its clients through multiple and interconnected communication channels; or

(c) a network of businesses involved in the production of a product or the provision of a service required by the end client to cover all movements of materials or information from point of origin to point of consumption;

(2) the provision of services related to the development, integration (installation and implementation), reconfiguration and evolution of a software package referred to in subparagraph 1;

(3) the provision of services required to support and train the personnel of the business and resolve bugs in relation to the integration of a software package referred to in subparagraph 1 into the business; and

(4) the sale or leasing of general-purpose data processing equipment and related system software, including ancillary data processing equipment, and of the application software required as part of the integration of a software package referred to in subparagraph 1 into the business, or of usage rights of such property.

An activity described in subparagraph 4 of the first paragraph constitutes the supply of a qualified management software package only if the property that is the subject of the activity was not used for any purpose or acquired or leased to be used or leased for any purpose whatsoever before it was acquired or leased by a corporation or partnership.

CHAPTER XVII

SECTORAL PARAMETERS OF TAX CREDIT FOR MAJOR DIGITAL TRANSFORMATION PROJECTS

DIVISION I

INTERPRETATION AND GENERAL RULES

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

“eligibility period” in relation to an eligible digitization contract of a corporation has the meaning assigned by section 1029.8.36.0.3.84 of the Taxation Act;

“job maintenance period” in relation to an eligible digitization contract of a corporation means the period beginning on the day that follows the last day of the eligibility period in relation to the eligible digitization contract and ending on the last day of the seven-year period that follows the time the eligible digitization activities provided for in that contract began to be carried out;

“tax credit for major digital transformation projects” means the fiscal measure provided for in Division II.6.0.1.10 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.

17.2. To benefit from the tax credit for major digital transformation projects, a corporation must obtain the following certificates from Investissement Québec:

(1) a certificate in respect of an eligible digitization contract (in this chapter referred to as a “contract certificate”); and

(2) a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as an “employee certificate”).

The employee certificate must be obtained for each taxation year for which the corporation intends to claim the tax credit.

The corporation must file an application for a certificate,

(1) in the case of a contract certificate, before the time the eligible digitization activities provided for in the contract begin to be carried out; or

(2) in the case of an employee certificate, within a reasonable time after the end of the taxation year for which the application for the certificate is made.

DIVISION II

CONTRACT CERTIFICATE

17.3. A contract certificate issued to a corporation certifies that the contract referred to in the certificate is recognized as an eligible digitization contract for the purposes of the tax credit for major digital transformation projects.

17.4. A contract entered into by a corporation may be recognized as an eligible digitization contract, if

(1) the contract is entered into after 17 March 2016 and before 1 January 2019;

(2) the contract is not a renewal or extension of an existing contract;

(3) the contract provides for the carrying out of eligible digitization activities for another person for a minimum period of seven years that begins on the day the activities begin to be carried out;

(4) the eligible digitization activities provided for in the contract result from activities that were entirely carried out outside Québec by another person for a minimum period of 24 months before the contract is entered into; and

(5) the carrying out of the contract gives rise to the creation, within a reasonable time after the eligible digitization activities provided for in the contract begin to be carried out, of at least 500 jobs in Québec held by individuals who meet the conditions of the first paragraph of section 17.10 and that minimum number of jobs is maintained until the end of a seven-year period following the time those activities begin to be carried out.

17.5. To determine whether a corporation meets the requirements relating to the creation and maintenance of a minimum number of 500 jobs set out in paragraph 5 of section 17.4 in relation to the carrying out of a contract, the following rules must be taken into account:

(1) the creation of a job in relation to the contract materializes, following the hiring of a new employee by the corporation, only once the duties of that employee begin to be carried on;

(2) subject to paragraph 3, an individual is considered to be a new employee of a corporation only if the employee has rendered no remunerated services to the corporation for a minimum period of 24 months before the contract is entered into; and

(3) a maximum number of 100 employees may be considered to be new employees even if they have already rendered remunerated services to the corporation during the period provided for in paragraph 2.

17.6. A corporation must send Investissement Québec, for each taxation year included in the job maintenance period in relation to an eligible digitization contract of the corporation, a prescribed form containing prescribed information to establish to Investissement Québec’s satisfaction that a minimum number of 500 jobs are being held throughout that period, by individuals who meet the conditions of the first paragraph of section 17.10.

The form must be sent to Investissement Québec within a reasonable time after the end of the taxation year referred to in the first paragraph.

The failure of a corporation to send the form in accordance with this section entails the revocation of the contract certificate issued in respect of the contract.

17.7. The requirement relating to the maintenance of a minimum number of 500 jobs set out in paragraph 5 of section 17.4 is deemed to be met, in relation to an eligible digitization contract of a corporation, if the corporation establishes to Investissement Québec’s satisfaction that if it does not meet the requirement it is because of exceptional circumstances beyond its control, such as the departure of employees and the impossibility of immediately filling the positions left vacant.

17.8. An eligible digitization activity is an activity provided for in a contract entered into by a corporation to allow the digital transformation of traditional functions that were previously carried out outside Québec by another person and includes the following activities:

(1) the operation of an e-business solution, such as the processing of electronic transactions through a transactional website;

(2) the management or operation of computer systems, applications or infrastructures stemming from e-business activities, including

(a) the management of e-business processing centres,

(b) the management of remote operations centres,

(c) the management of networks and systems, including systems monitoring,

(d) the operation of business process outsourcing services related to the operation of an e-business solution (back office), and

(e) the management of business processes associated with the internal operation of an e-business solution (internal back office);

(3) the operation of a customer relations centre, including

(a) the operation of an existing customer relations management service stemming from e-business activities, and

(b) the operation of a first-level administrative or technical assistance service for businesses and customers, related to the use of an e-business solution, such as taking calls or emails, user support in the use of systems, applications and features, monitoring and recording of requests, initial diagnosis and advice to resolve incidents or problems, referral of information concerning such incidents or problems to more specialized persons for resolution, and resetting passwords;

(4) hardware installation;

(5) training activities;

(6) claims processing;

(7) risk monitoring and control; and

(8) product profitability analysis.

DIVISION III

EMPLOYEE CERTIFICATE

17.9. An employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

17.10. An individual may be recognized as an eligible employee of a corporation, if

(1) the individual works full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks, in the course of carrying out one or more eligible digitization contracts;

(2) the individual spends at least 75% of working time performing duties that consist in undertaking or directly supervising eligible digitization activities carried out under one or more eligible digitization contracts; and

(3) the individual is identified in respect of a single eligible digitization contract for the purpose of determining whether the corporation meets the requirements relating to the creation and maintenance of a minimum number of 500 jobs set out in paragraph 5 of section 17.4.

For the purposes of subparagraph 2 of the first paragraph, the following rules apply:

(a) where part of an individual’s duties consist in undertaking or directly supervising eligible activities described in section 13.11, that part of the individual’s duties is deemed to consist in the carrying out of eligible digitization activities under an eligible digitization contract; and

(b) an individual’s administrative tasks may not be considered to be part of duties that consist in undertaking or directly supervising eligible digitization activities.

In this section, “administrative tasks” include tasks relating to operations management, accounting, finance, legal affairs, public relations, communications, contract solicitation, and human and physical resources management.

17.11. For the purposes of the first paragraph of section 17.10, if an individual is temporarily absent from work for reasons Investissement Québec considers reasonable, the individual is deemed to have 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.

17.12. Investissement Québec may not issue an employee certificate in respect of an individual to a corporation for a taxation year or part of the taxation year, if a certificate in respect of the individual has been issued, for the same year or part of year, under Division III of Chapter XIII.

CHAPTER XVIII

SECTORAL PARAMETERS OF TAX CREDIT FOR DIGITAL TRANSFORMATION OF PRINT MEDIA

DIVISION I

INTERPRETATION AND GENERAL RULES

18.1. In this chapter, “tax credit for the digital transformation of print media” means the fiscal measure provided for in Division II.6.0.1.11 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.

18.2. To benefit from the tax credit for the digital transformation of print media, a corporation or, if it claims the tax credit as a member of a partnership, the partnership must obtain the following certificates from Investissement Québec:

(1) a certificate in respect of a print media business carried on by the corporation or partnership (in this chapter referred to as a “business certificate”);

(2) a certificate in respect of each contract for which the corporation claims the tax credit (in this chapter referred to as a “contract certificate”); and

(3) a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as an “employee certificate”).

The certificates referred to in subparagraphs 1 and 3 of the first paragraph must be obtained for each taxation year for which the corporation intends to benefit from the tax credit or for each fiscal period of the partnership of which the corporation is a member that ends in such a taxation year.

DIVISION II

BUSINESS CERTIFICATE

18.3. A business certificate issued to a corporation or a partnership for a taxation year or a fiscal period, as the case may be, certifies that, in the year or fiscal period, the corporation or partnership produced and disseminated a print media that is recognized as an eligible media. The name of that media is specified in the certificate.

18.4. A print media may be recognized as an eligible media if

(1) the media consists in the production and daily or periodic dissemination, by means of a print publication, an information website or a mobile application dedicated to information, of original information content that is specifically intended for the Québec public and pertains to general interest news covering at least three eligible themes; and

(2) the newsroom of that media is located in an establishment, situated in Québec, of the corporation or partnership that publishes it and brings together journalists responsible for original information content.

A print media published on a periodic basis is considered to be an eligible media only if it is produced and disseminated at least 10 times per year.

A corporation or partnership must, to obtain a first business certificate, establish to Investissement Québec’s satisfaction that the print media that is referred to in the application for the certificate has been produced and disseminated during a period of at least 12 months before the application was filed.

18.5. Original information content includes a news report, profile, interview, analysis, column, investigative report or editorial. Only written content may be recognized as original information content.

However, none of the following contents are considered to be original information content:

(1) content from a press agency or another media;

(2) specialized content pertaining to a type of personal, recreational or professional activity and geared specifically towards a group, association or category of persons;

(3) content for which a compensation is paid by a third person or a partnership;

(4) content of an advertising or promotional nature, such as an advertorial; and

(5) theme-based content on, for example, hunting and fishing, decoration or science.

A print media that includes, on an incidental basis, excluded content described in the second paragraph may nevertheless be recognized as an eligible media.

18.6. Each of the following topical themes constitutes an eligible theme:

(1) business and the economy;

(2) culture;

(3) international sector;

(4) municipal affairs;

(5) miscellaneous news items;

(6) local interest news; and

(7) politics.

DIVISION III

CONTRACT CERTIFICATE

18.7. A contract certificate issued to a corporation or a partnership certifies that the contract referred to in the certificate and to which the corporation or partnership is a party is recognized as an eligible digital conversion contract.

18.8. A contract entered into by a person or partnership that carries on a print media business is recognized as an eligible digital conversion contract if it pertains to one or more of the following elements:

(1) the acquisition or lease of a qualified property;

(2) the supply of eligible services; or

(3) the attribution of a right of use or of an eligible licence, in relation to a property of another person or partnership.

However, such a contract may be so recognized only if each of the elements to which it pertains serves to start or continue the digital conversion of a print media whose name is specified in a business certificate issued to the corporation or partnership and relates to an establishment of the corporation or partnership situated in Québec in which the media is produced or from which it is disseminated.

18.9. A property acquired or leased by a corporation or a partnership is a qualified property if it constitutes, as the case may be,

(1) general-purpose data processing equipment and the related system software, including ancillary data processing equipment; or

(2) an application software.

However, such a property may be considered to qualify only if it is intended that it will be used by the corporation or partnership, in whole or in part, to carry out eligible digital conversion activities that relate to a print media whose name is specified in a business certificate issued to the corporation or partnership.

18.10. Services supplied to a corporation or partnership are eligible if it is intended that they will consist in the carrying out of eligible digital conversion activities that relate, in whole or in part, to a print media whose name is specified in a business certificate issued to the corporation or partnership.

18.11. A right of use or licence granted to a corporation or partnership, in relation to a property of another person or partnership, is eligible if it is intended that the right or licence will be used by the corporation or partnership, in whole or in part, to carry out eligible digital conversion activities that relate to a print media whose name is specified in a business certificate issued to the corporation or partnership.

18.12. Each of the following activities is an eligible digital conversion activity of a print media published by a corporation or partnership:

(1) an information system development activity;

(2) a technological infrastructure integration activity; and

(3) any activity relating to the maintenance or upgrade of such a system or infrastructure, to the extent that it is incidental to an activity described in subparagraph 1 or 2, as the case may be.

Activities described in the first paragraph include

(1) the development of an interactive decision aid (business modeling); and

(2) the development of a tool providing an image of the current state of the print media publishing business for data analysis purposes (business intelligence).

An activity may be considered to be eligible only if it is directly related to the start or continuation of the digital conversion of a print media whose name is specified in a business certificate issued to the corporation or partnership.

However, none of the following activities are considered to be an eligible digital conversion activity of a print media:

(1) the day-to-day operation of an aid or tool described in the second paragraph;

(2) the management or operation of a computer system, an application or a technological infrastructure;

(3) the operation of a customer relations management service;

(4) the management or operation of a marketing information system designed to raise the visibility of the print media and promote it to an existing or potential clientele; or

(5) any other management or operation activity carried on to produce or disseminate the print media.

DIVISION IV

EMPLOYEE CERTIFICATE

18.13. An employee certificate issued to a corporation or partnership certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation or partnership for, as the case may be, the taxation year or fiscal period for which the application for the certificate was made or for the part of that year or fiscal period that is specified in the certificate.

18.14. An individual may be recognized as an eligible employee of a corporation or partnership, if

(1) the individual works full-time for the corporation or partnership, that is, at least 26 hours per week, for an expected minimum period of 40 weeks; and

(2) at least 75% of the individual’s duties consist in undertaking or directly supervising eligible digital conversion activities that relate to a print media whose name is specified in a business certificate issued to the corporation or partnership.

For the purposes of subparagraph 2 of the first paragraph, an individual’s administrative tasks are not to be considered as part of duties consisting in undertaking or directly supervising eligible digital conversion activities.

In this section, “administrative tasks” include tasks relating to operations management, accounting, finance, legal affairs, public relations, communications, contract solicitation, and human and physical resources management.

18.15. Where an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as an eligible employee of a corporation or partnership, 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.

CHAPTER XIX

SECTORAL PARAMETERS OF TAX CREDIT TO SUPPORT PRINT MEDIA

DIVISION I

INTERPRETATION AND GENERAL RULES

19.1 In this chapter,

“tax credit to support print media” means the fiscal measure provided for in Division II.6.0.1.12 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;

“transitional period” means the calendar year 2019;

“wholly-owned subsidiary” of a corporation or partnership has the meaning assigned by the first paragraph of section 1029.8.36.0.3.109 of the Taxation Act.

19.2 To benefit from the tax credit to support print media, a corporation or, if it claims the tax credit as a member of a partnership, the partnership must obtain the following certificates from Investissement Québec:

(1) a certificate in respect of a print media business carried on by the corporation or partnership (in this chapter referred to as a “business certificate”); and

(2) a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as an “employee certificate”).

The certificates must be obtained for each taxation year for which the corporation intends to benefit from the tax credit or for each fiscal period of the partnership of which the corporation is a member that ends in such a taxation year.

Where a corporation or a partnership has a wholly-owned subsidiary, it must also obtain from Investissement Québec, for a taxation year or a fiscal period, as the case may be, that includes all or part of the transitional period, a certificate (in this chapter referred to as an “employee certificate”) in respect of each individual who works for the wholly-owned subsidiary and whose wages are taken into account in computing the portion of the consideration in respect of which the corporation or a corporation that is a member of the partnership claims the tax credit.

19.3 Despite section 9.1 of this Act, the time limit within which a corporation or a partnership may apply for a certificate for a taxation year or a fiscal period, as the case may be, may not, for the purposes of this chapter, end before 16 September 2020.

DIVISION II

BUSINESS CERTIFICATE

19.4 A business certificate issued to a corporation or a partnership for a taxation year or a fiscal period, as the case may be, certifies that, in the year or fiscal period, the corporation or partnership produced and disseminated a print media that is recognized as an eligible media. The name of that media and the address of the establishment in which its newsroom is located are specified in the certificate.

19.5 A print media may be recognized as an eligible media if

(1) the media consists in the daily or periodic production and dissemination, by means of a print publication, an information website or a mobile application dedicated to information, of original information content that is specifically intended for the Québec public and pertains to general interest news covering at least three eligible themes; and

(2) the newsroom of that media is located in an establishment, situated in Canada, of the corporation or partnership that publishes it and brings together journalists responsible for original information content.

A print media published on a periodic basis is considered to be an eligible media only if it is produced and disseminated at least 10 times per year.

A corporation or a partnership must, to obtain a first business certificate, establish to Investissement Québec’s satisfaction that the print media that is referred to in the application for the certificate has been produced and disseminated during a period of at least 12 months before the application was filed.

19.6 Original information content includes a news report, profile, interview, analysis, column, investigative report or editorial. Only written content may be recognized as original information content.

However, none of the following contents are considered to be original information content:

(1) content from a press agency or another media;

(2) specialized content pertaining to a type of personal, recreational or professional activity and geared specifically towards a group, association or category of persons;

(3) content for which a compensation is paid by a third person or a partnership;

(4) content of an advertising or promotional nature, such as an advertorial; and

(5) theme-based content on, for example, hunting and fishing, decoration or science.

A print media that includes, on an incidental basis, excluded content described in the second paragraph may nevertheless be recognized as an eligible media.

19.7 Each of the following topical themes constitutes an eligible theme:

(1) business and the economy;

(2) culture;

(3) international sector;

(4) municipal affairs;

(5) miscellaneous news items;

(6) local interest news; and

(7) politics.

DIVISION III

EMPLOYEE CERTIFICATE

19.8 An employee certificate issued to a corporation or partnership certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation or partnership for, as the case may be, the taxation year or fiscal period for which the application for the certificate was made or for the part of that year or fiscal period that is specified in the certificate.

However, where the corporation’s taxation year or the partnership’s fiscal period includes all or part of the transitional period and the individual works for a wholly-owned subsidiary of the corporation or partnership, the employee certificate issued to the corporation or partnership in respect of the individual certifies that the individual is recognized as an eligible employee of the corporation’s or partnership’s wholly-owned subsidiary for, as the case may be, the taxation year or fiscal period or for the part of that year or fiscal period that is specified in the certificate.

19.9 An individual may be recognized as an eligible employee of a corporation or partnership, if

(1) the individual works full-time for the corporation or partnership, that is, at least 26 hours per week, for an expected minimum period of 40 weeks; and

(2) at least 75% of the individual’s duties consist in undertaking or directly supervising activities consisting in producing original information content intended for publication in a print media or information technology activities related to the production or dissemination of such contents.

For the purpose of determining whether an individual is recognized as an eligible employee of a corporation that is a wholly-owned subsidiary of another corporation or a partnership, for the purposes of subparagraph 2 of the first paragraph, only the activities that the individual undertakes or supervises on behalf of the other corporation or the partnership and that are information technology activities related to the production or dissemination of original information content intended for publication in a print media of the other corporation or the partnership are taken into account.

An individual’s tasks that relate to digital conversion activities or that are administrative tasks are not to be considered as part of duties consisting in undertaking or directly supervising activities to which subparagraph 2 of the first paragraph refers.

In this section,

“administrative tasks” include tasks relating to operations management, accounting, finance, legal affairs, public relations, communications, contract solicitation, and human and physical resources management;

“digital conversion activity” means an activity described in the first or second paragraph of section 18.12;

“print media” of a corporation or partnership means a print media whose name is specified in a business certificate that has been issued to the corporation or partnership, as the case may be.

19.10 Activities consisting in producing original information content include researching, collecting information, verifying facts, photographing, writing, editing, designing and any other content preparation activity.

19.11 The following activities are information technology activities:

(1) the management or operation of a computer system, an application or a technological infrastructure;

(2) the operation of a computerized customer relations management service;

(3) the management or operation of a marketing information system designed to raise the visibility of a print media and promote it to an existing or potential clientele; or

(4) any other information system management or operation activity carried on to produce or disseminate a print media.

19.12 Where an individual is temporarily absent from work for reasons it considers reasonable, Investissement Québec may, for the purpose of determining whether the individual meets the conditions for recognition as an eligible employee of a corporation or partnership, 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.

CHAPTER XX

SECTORAL PARAMETERS OF TAX CREDIT TO FOSTER SYNERGY BETWEEN QUÉBEC BUSINESSES

DIVISION I

INTERPRETATION AND GENERAL RULES

20.1. In this chapter, “tax credit to foster synergy between Québec businesses” means the fiscal measure provided for in Title III.6 of Book V of Part I of the Taxation Act, under which a corporation may deduct an amount in computing its tax payable under that Part for a taxation year.

20.2. A corporation that wishes to issue shares of its capital stock, the acquisition of which allows another corporation to benefit from the tax credit to foster synergy between Québec businesses, must obtain an authorized investment certificate from Investissement Québec.

20.3. An application for an authorized investment certificate must be accompanied by a detailed description of the intended use of the funds from the issue of shares of the corporation’s capital stock and the planned time frame for that use.

DIVISION II

AUTHORIZED INVESTMENT CERTIFICATE

20.4. An authorized investment certificate issued to a corporation certifies that the corporation is a qualified corporation that is authorized to issue, for the purposes of the tax credit to foster synergy between Québec businesses, shares of its capital stock for an amount not exceeding the authorized investment amount specified in the certificate. The certificate also confirms that, in the opinion of Investissement Québec, the intended use of the funds from the issue of shares of the corporation’s capital stock, as detailed in the document referred to in section 20.3, is an eligible use of the funds.

The date of coming into force of the authorized investment certificate issued to the corporation may not precede the date of its issue.

The certificate is valid for a period of six months following the date of its issue. However, the corporation may, before the end of that period, apply to Investissement Québec to have it extended for a period of two months.

However, the aggregate of all amounts each of which is the authorized investment amount specified in an authorized investment certificate issued to a corporation may not, for each 12-month period, exceed $1,000,000 in respect of that corporation.

In addition, the total of the authorized investment amounts specified in the authorized investment certificates issued by Investissement Québec during a calendar year must not exceed $30,000,000.

20.5. A corporation may be recognized as a qualified corporation if

(1) it is a Canadian-controlled private corporation throughout the particular year that is its last taxation year that ended before the day on which an application for an authorized investment certificate was filed;

(2) it carries on a business in Québec in the particular year and has an establishment in Québec;

(3) the paid-up capital attributed to the corporation for the particular year, determined in accordance with section 737.18.24 of the Taxation Act, is less than $15,000,000;

(4) at least 75% of the salaries or wages paid in the particular year to its employees was paid to employees who are, within the meaning of the regulations made under section 771 of the Taxation Act, employees of an establishment situated in Québec;

(5) its gross revenue for its last fiscal period that ended before the day on which the application for the certificate was filed is less than $10,000,000; and

(6) the proportion of its gross revenue from eligible activities for the fiscal period described in subparagraph 5 is greater than 50%.

In addition, the corporation must establish to Investissement Québec’s satisfaction that, at the time the application for the authorized investment certificate is filed, it has been carrying on eligible activities for more than one year.

However, where the last taxation year or the last fiscal period referred to in the first paragraph has fewer than 183 days, the conditions of subparagraphs 4 to 6 of the first paragraph must be met for the corporation’s most recent taxation year or most recent fiscal period, as applicable, that ended before the day on which the application for the authorized investment certificate was filed and that has at least 183 days.

For the purposes of this section, a condition described in any of subparagraphs 1 to 4 of the first paragraph is considered to be met only if it is so considered for the purposes of the Taxation Act.

20.6. Where a corporation is associated with another corporation in a fiscal period, its gross revenue for that period is equal to the gross revenue for that period of all the corporations associated with each other in that period, determined on the basis of the consolidated statement of earnings of those corporations prepared in accordance with generally accepted accounting principles.

For the purposes of the first paragraph, a corporation is considered to be associated with another corporation in a fiscal period where the corporation would be so considered for the purposes of Part I of the Taxation Act if the fiscal period were a taxation year.

20.7. The following activities are eligible activities:

(1) activities related to life sciences;

(2) manufacturing or processing;

(3) activities related to green technologies;

(4) the design and development of artificial intelligence solutions; and

(5) activities related to information technologies.

20.8. The following activities are activities related to life sciences:

(1) research, development, production and marketing of medications for human or animal health, or of natural health products; and

(2) the design, development, manufacturing and commercialization of physical or digital medical products, other than medications.

20.9. The following activities are activities related to green technologies:

(1) research and development for the commercial operation of technologies that increase energy efficiency or energy savings or that reduce greenhouse gas emissions or environmental impacts; and

(2) manufacturing or processing for the commercial operation of technologies referred to in paragraph 1.

20.10. The following activities are activities related to information technologies:

(1) computer and peripheral equipment manufacturing;

(2) semiconductor and other electronic component manufacturing;

(3) radio and television broadcasting and wireless communications equipment manufacturing;

(4) software or video game publishing;

(5) data processing;

(6) data hosting and related services; and

(7) computer systems design and related services.

20.11. Subject to section 20.12, the use of the funds from an issue of shares of a corporation’s capital stock in relation to an authorized investment certificate is an eligible use if the funds are used for investments related to the carrying on of the corporation’s business in connection with its eligible activities, in accordance with the detailed description referred to in section 20.3, including any amendment made to the description in agreement with Investissement Québec.

20.12. Where a corporation’s activities are mainly referred to in paragraph 2 of section 20.7 and are not otherwise referred to in any of paragraphs 1, 3 and 5 of that section, the use of the funds from an issue of shares of a corporation’s capital stock in relation to an authorized investment certificate is an eligible use if the funds are used in accordance with the detailed description referred to in section 20.3 and in connection with investments related to the carrying on of its business either to improve the use of or connection to new technologies or to integrate technologies enabling, in particular, the digitization or automation of the business’s activities.

20.13. The use of the funds from an issue of shares of a corporation’s capital stock in relation to an authorized investment certificate for any of the following purposes is a use for an ineligible purpose:

(1) making investments outside Québec, unless the corporation can show that the investment is directly related to the carrying on of its business in Québec;

(2) repaying a debt, except with the agreement of Investissement Québec;

(3) lending money;

(4) purchasing land for resale;

(5) purchasing, acquiring or subscribing shares of other corporations or interests in partnerships or trusts;

(6) purchasing a business;

(7) paying dividends, repaying capital or any other disbursement to a shareholder of the corporation or a person related to such a shareholder; and

(8) purchasing shares of its capital stock.

DIVISION III

SPECIAL RULES

20.14. A corporation must, for the particular taxation year that includes the day on which an authorized investment certificate is applied for and for each taxation year that begins in the 48-month period following the end of the particular year, meet the following conditions:

(1) it is a Canadian-controlled private corporation throughout the year;

(2) it carries on a business in Québec in the year and has an establishment in Québec; and

(3) more than 50% of the salaries or wages paid to its employees in the year has been paid to employees who are, within the meaning of the regulations made under section 771 of the Taxation Act, employees of an establishment situated in Québec.

In addition, the proportion of the corporation’s gross revenue from eligible activities must be greater than 50% for the particular fiscal period that includes the day on which an authorized investment certificate is applied for and for each fiscal period that begins in the 48-month period following the end of the particular fiscal period.

For the purposes of this section, a condition described in the first paragraph is considered to be met only when it is considered to be met for the purposes of the Taxation Act.

20.15. Investissement Québec may revoke an authorized investment certificate that has been issued to a corporation or reduce the amount of the authorized investment that is specified in the certificate in the following cases:

(1) for the particular fiscal period that includes the day on which the application for the authorized investment certificate is filed or for a fiscal period that begins in the 48-month period following the end of the particular fiscal period, the proportion of the corporation’s gross revenue from eligible activities is not greater than 50%;

(2) the corporation does not use all or part of the funds from the issue of shares of its capital stock in relation to the authorized investment certificate in accordance with the detailed description referred to in section 20.3 that was filed with Investissement Québec to obtain the certificate, including any amendment made to the description in agreement with that body, or uses the funds for an ineligible purpose; or

(3) at any time in the 60-month period that begins on the day on which shares of its capital stock were issued in relation to the authorized investment certificate, the corporation unilaterally redeems all or part of the shares, or redeems all the shares it issued to another corporation in relation to the certificate, where the law confers on the other corporation the right to demand that all its shares be redeemed.

2012, c. 1, Schedule A; 2013, c. 10, ss. 178 to 186; I.N. 2015-06-01; 2015, c. 21, ss. 541 to 559; 2015, c. 36, ss. 175 to 178; 2017, c. 1, ss. 394 to 401; 2017, c. 29, ss. 226 to 230; 2019, c. 14, ss. 476 to 478; 2021, c. 14, ss. 200 to 206; 2021, c. 18, ss.164 to 166.

ANNEXE B

(Repealed).

2012, c. 1, Schedule B; 2021, c. 18, s. 167.

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; 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.

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 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,

(c) the transfer of advanced technologies resulting 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

(c) the Minister considers that the reasons put forward justify the admissibility of the application.

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

(c) integrating advanced or ecological technologies; 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,

(c) the corporation referred to in the first paragraph of section 10.2, or

(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.

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. 14, s. 207.

SCHEDULE D

MINISTER OF HIGHER EDUCATION, RESEARCH, SCIENCE AND TECHNOLOGY

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. The Minister of Higher Education, Research, Science and Technology administers the sectoral parameters of the following fiscal measures:

(1) the deduction in respect of a foreign researcher on a postdoctoral internship provided for in sections 737.22.0.0.1 to 737.22.0.0.4 of the Taxation Act (chapter I-3);

(2) the deduction in respect of foreign professors provided for in sections 737.22.0.5 to 737.22.0.8 of the Taxation Act;

(3) (paragraph repealed);

(4) (paragraph repealed);

(5) (paragraph repealed);

(6) (paragraph repealed).

CHAPTER II

SECTORAL PARAMETERS OF DEDUCTION IN RESPECT OF FOREIGN RESEARCHERS ON POSTDOCTORAL INTERNSHIP

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible employer” means an eligible public research centre or an eligible university entity;

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

“eligible university entity” means an entity that is 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;

“tax holiday for a foreign researcher on a postdoctoral internship” means the fiscal measure provided for in Title VII.3.0.1 of Book IV of Part I of the Taxation Act, under which an individual may deduct an amount in computing his or her taxable income for a taxation year.

2.2. In order for an individual who works for an eligible employer to benefit from the tax holiday for a foreign researcher on a postdoctoral internship for a taxation year, the eligible employer must obtain a certificate in respect of the individual (in this chapter referred to as a “researcher 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 the application for the certificate before 1 March of the calendar year that follows the individual’s taxation year concerned.

DIVISION II

RESEARCHER CERTIFICATE

2.3. A researcher certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized as a researcher on a postdoctoral internship in respect of the employer for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

2.4. An individual may be recognized as a researcher on a postdoctoral internship in respect of an eligible employer if

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

(2) the individual holds, subject to the second paragraph, a doctoral degree in one of the fields referred to in subparagraph 1 or another degree that, in the Minister’s opinion, is equivalent;

(3) the individual is serving a full-time postdoctoral internship as a researcher with the employer for a set term; and

(4) the individual’s duties with the employer are performed exclusively or almost exclusively, on a continuous basis, as a researcher within the scope of the postdoctoral internship.

For the condition of subparagraph 2 of the first paragraph to be met, not more than five years may have elapsed, at the time the individual begins a full-time postdoctoral internship with the eligible employer for the first time, since the individual obtained the diploma referred to in that subparagraph. However, if, before beginning that first internship, the individual temporarily interrupted his or her research activities for reasons the Minister considers reasonable, the time elapsed may be longer, but must not exceed 10 years.

2.5. 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 a researcher on a postdoctoral internship 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.

2.6. An eligible employer to which a researcher 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 III

SECTORAL PARAMETERS OF DEDUCTION IN RESPECT OF FOREIGN PROFESSORS

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible employer” means a Québec university;

“foreign professor tax holiday” means the fiscal measure provided for in Title VII.3.2 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.

3.2. In order for an individual who works for an eligible employer to benefit from the foreign professor tax holiday for a taxation year, the eligible employer must obtain a certificate in respect of the individual (in this chapter referred to as a “professor 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 the application for the certificate before 1 March of the calendar year that follows the individual’s taxation year concerned.

DIVISION II

PROFESSOR CERTIFICATE

3.3. A professor certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized as a professor in respect of the employer for the taxation year for which the application for the certificate was made or for the part of the year specified in it.

3.4. An individual may be recognized as a professor in respect of an eligible employer if

(1) the individual holds a position as a professor with the employer;

(2) the individual is specialized in the field of science and engineering, finance, health or new information and communication technologies;

(3) the individual holds a doctoral degree in one of the fields referred to in paragraph 2 or another degree that, in the Minister’s opinion, is equivalent; and

(4) the individual’s duties with the employer are performed exclusively or almost exclusively, on a continuous basis, as a professor in one of the fields referred to in paragraph 2.

3.5. 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 a professor in respect of an eligible employer, consider that the individual continued to perform the his or her duties throughout the period of absence exactly as he or she was performing them immediately before the beginning of that period.

3.6. An eligible employer to which a professor 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 IV

Chapter renumbered, see Chapter III of Schedule C (2019, c. 29, s. 104).

DIVISION I

Division renumbered, see Division I of Chapter III of Schedule C (2019, c. 29, s. 104).

4.1. (Section renumbered, see section 3.1 of Chapter III of Schedule C; 2019, c. 29, s. 104).

4.2. (Section renumbered, see section 3.2 of Chapter III of Schedule C; 2019, c. 29, s. 104).

DIVISION II

Division renumbered, see Division II of Chapter III of Schedule C (2019, c. 29, s. 104).

4.3. (Section renumbered, see section 3.3 of Chapter III of Schedule C; 2019, c. 29, s. 104).

4.4. (Section renumbered, see section 3.4 of Chapter III of Schedule C; 2019, c. 29, s. 104).

4.5. (Section renumbered, see section 3.5 of Chapter III of Schedule C; 2019, c. 29, s. 104).

CHAPTER V

Chapter renumbered, see Chapter IV of Schedule C (2019, c. 29, s. 104).

DIVISION I

Division renumbered, see Division I of Chapter IV of Schedule C (2019, c. 29, s. 104).

5.1. (Section renumbered, see section 4.1 of Chapter IV of Schedule C; 2019, c. 29, s. 104).

5.2. (Section renumbered, see section 4.2 of Chapter IV of Schedule C; 2019, c. 29, s. 104).

DIVISION II

Division renumbered, see Division II of Chapter IV of Schedule C (2019, c. 29, s. 104).

5.3. (Section renumbered, see section 4.3 of Chapter IV of Schedule C; 2019, c. 29, s. 104).

5.4. (Section renumbered, see section 4.4 of Chapter IV of Schedule C; 2019, c. 29, s. 104).

5.5. (Section renumbered, see section 4.5 of Chapter IV of Schedule C; 2019, c. 29, s. 104).

5.6. (Section renumbered, see section 4.6 of Chapter IV of Schedule C; 2019, c. 29, s. 104).

CHAPTER VI

Chapter renumbered, see Chapter VI of Schedule C (2019, c. 29, s. 104).

DIVISION I

Division renumbered, see Division I of Chapter VI of Schedule C (2019, c. 29, s. 104).

6.1. (Section renumbered, see section 6.1 of Chapter VI of Schedule C; 2019, c. 29, s. 104).

6.2. (Section renumbered, see section 6.2 of Chapter VI of Schedule C; 2019, c. 29, s. 104).

DIVISION II

Division renumbered, see Division II of Chapter VI of Schedule C (2019, c. 29, s. 104).

6.3. (Section renumbered, see section 6.3 of Chapter VI of Schedule C; 2019, c. 29, s. 104).

6.4. (Section renumbered, see section 6.4 of Chapter VI of Schedule C; 2019, c. 29, s. 104).

6.5. (Section renumbered, see section 6.5 of Chapter VI of Schedule C; 2019, c. 29, s. 104).

CHAPTER VII

Chapter renumbered, see Chapter VII of Schedule C (2019, c. 29, s. 104).

DIVISION I

Division renumbered, see Division I of Chapter VII of Schedule C (2019, c. 29, s. 104).

7.1. (Section renumbered, see section 7.1 of Chapter VII of Schedule C; 2019, c. 29, s. 104).

7.2. (Section renumbered, see section 7.2 of Chapter VII of Schedule C; 2019, c. 29, s. 104).

DIVISION II

Division renumbered, see Division II of Chapter VII of Schedule C (2019, c. 29, s. 104).

7.3. (Section renumbered, see section 7.3 of Chapter VII of Schedule C; 2019, c. 29, s. 104).

7.4. (Section renumbered, see section 7.4 of Chapter VII of Schedule C; 2019, c. 29, s. 104).

7.5. (Section renumbered, see section 7.5 of Chapter VII of Schedule C; 2019, c. 29, s. 104).

2012, c. 1, Schedule D; 2013, c. 28, s. 175 to s. 177; 2019, c. 29, ss. 103 and 104.

SCHEDULE E

MINISTER OF FINANCE

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. The Minister of Finance administers the sectoral parameters of the following fiscal measures:

(1) the tax credit for international financial centres in respect of back-office activities or of activities relating to an eligible contract provided for in sections 1029.8.36.166.61 to 1029.8.36.166.64 of the Taxation Act (chapter I-3);

(2) the deduction relating to foreign specialists assigned to the operations of an international financial centre provided for in sections 65 to 70 of the Act respecting international financial centres (chapter C-8.3) and sections 737.16 and 737.18 of the Taxation Act;

(3) (subparagraph repealed);

(4) the deduction relating to foreign specialists in the service of a corporation that operates a stock exchange or a securities clearing-house provided for in sections 737.18.29 to 737.18.30.3, 737.18.34 and 737.18.35 of the Taxation Act;

(5) the tax credits relating to new financial services corporations provided for in sections 1029.8.36.166.65 to 1029.8.36.166.79 of the Taxation Act;

(6) the deduction relating to foreign specialists working for financial services corporations provided for in sections 737.22.0.4.1 to 737.22.0.4.8 of the Taxation Act;

(7) the tax holidays relating to the carrying out of a large investment project provided for in sections 737.18.17.1 to 737.18.17.13 of the Taxation Act and sections 33, 34, 34.1.0.3 and 34.1.0.4 of the Act respecting the Régie de l’assurance maladie du Québec; and

(8) the tax credit for international financial centres in respect of activities other than back-office activities provided for in sections 776.1.27 to 776.1.35 of the Taxation Act.

CHAPTER II

SECTORAL PARAMETERS OF TAX CREDIT FOR INTERNATIONAL FINANCIAL CENTRES IN RESPECT OF BACK-OFFICE ACTIVITIES OR OF ACTIVITIES RELATING TO AN ELIGIBLE CONTRACT 

DIVISION I

INTERPRETATION AND GENERAL

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

“back-office activities” has the meaning assigned by section 4 of the Act respecting international financial centres;

“eligible contract” means a contract referred to in section 8.2 of the Act respecting international financial centres;

“foreign financial entity” has the meaning assigned by section 4 of the Act respecting international financial centres;

“international financial centre” means a business described in section 6 of the Act respecting international financial centres;

“qualified international financial operation” has the meaning assigned by section 4 of the Act respecting international financial centres;

“qualified international financial transaction” means, subject to sections 7.2 and 8.1 of the Act respecting international financial centres, a back-office activity referred to in paragraph 22 of section 7 of that Act;

“specialized worker” of a corporation for a particular period means an individual who, in any of the individual’s taxation years during which the individual works for a corporation, is recognized as a specialist for a particular period of that taxation year, according to a certificate referred to in subparagraph 2 of the first paragraph of section 3.2 that was issued to the corporation;

“tax credit for international financial centres” means the fiscal measure provided for in Division II.6.14.3 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;

“urban agglomeration of Montréal” has the meaning assigned by section 4 of the Act respecting international financial centres.

2.2. A corporation that intends to operate an international financial centre within the urban agglomeration of Montréal and that wishes to benefit from the tax credit for international financial centres must obtain from the Minister

(1) a qualification certificate in respect of that business (in this chapter referred to as a “corporation qualification certificate”);

(1.1) a qualification certificate in respect of each of the contracts for which it wishes to benefit from the tax credit (in this chapter referred to as a “contract qualification certificate”); and

(2) a qualification certificate in respect of each of the individuals for which it wishes to benefit from the tax credit (in this chapter referred to as an “employee qualification certificate”).

Moreover, to benefit from the tax credit, such a corporation must also obtain from the Minister

(1) a certificate in respect of that business (in this chapter referred to as a “business certificate”);

(1.1) a certificate in respect of each of the contracts for which it claims the tax credit (in this chapter referred to as a “contract certificate”); and

(2) a certificate in respect of each of the individuals for which it claims the tax credit (in this chapter referred to as an “employee certificate”).

A contract qualification certificate may be obtained only once. It is valid until the last day of the 10-year period that begins on the date on which the contract qualification certificate is applied for or, if it is later, the date on which the activities provided for in the contract referred to in the contract qualification certificate begin to be carried out.

The certificates referred to in the second paragraph must be obtained for each taxation year for which the corporation intends to claim the tax credit for international financial centres.

DIVISION II

BUSINESS-RELATED DOCUMENTS

2.3. A business qualification certificate issued to a corporation certifies, subject to the Act respecting international financial centres, that the business referred to in the certificate is recognized as an international financial centre. It also specifies that the activities engaged in or to be engaged in in the course of carrying on the business pertain to qualified international financial transactions or to one or more eligible contracts.

2.4. The Minister issues a business qualification certificate to a corporation if the Minister is of the opinion that the activities engaged in or to be engaged in by the corporation in the course of carrying on its business are in compliance with the provisions and objectives of the Act respecting international financial centres.

2.5. A business certificate issued to a corporation certifies that the business that is referred to in the certificate and that is carried on by the corporation in the taxation year for which the application for the certificate is filed is recognized for that year, or for the part of that year that is specified in the certificate, as an international financial centre. It also specifies that the activities engaged in in the course of carrying on the business pertain to qualified international financial transactions or to one or more eligible contracts.

2.6. The Minister may issue a business certificate to a corporation if, for all or part of the taxation year for which the application for the certificate is filed,

(1) the business qualification certificate issued in respect of the business was valid; and

(2) the Minister is of the opinion that

(a) the activities of the business were related to qualified international financial transactions or to one or more eligible contracts, and

(b) the activities of the business that are referred to in subparagraph a and, if applicable, the activities of another business of the corporation that are referred to in subparagraph a of subparagraph 2 of the first paragraph of section 9.7 required, at all times, the work of at least six individuals each of whom is recognized by the Minister as an eligible employee of the corporation, for all or part of the year or part of year, under an employee certificate or a certificate referred to in subparagraph 2 of the second paragraph of section 9.3 that the corporation obtained in respect of the employee for the year.

Where an individual is a specialized worker of the corporation for a particular period that begins or ends in a taxation year of the corporation, the following presumptions must be taken into account for the purposes of subparagraph b of subparagraph 2 of the first paragraph:

(1) the individual is deemed to have been recognized by the Minister as an eligible employee of the corporation for the part of the taxation year that is included in the particular period; and

(2) the corporation is deemed to have obtained an employee certificate in respect of the individual for the taxation year, under which the individual is so recognized.

2.7. If the condition of subparagraph b of subparagraph 2 of the first paragraph of section 2.6 is not met for a particular period of a taxation year for which a business qualification certificate issued to a corporation is valid, the Minister may nevertheless recognize the business for the particular period provided the corporation shows, to the Minister’s satisfaction, that the situation is temporary and due to exceptional circumstances that are beyond its control.

DIVISION II.1

CONTRACT-RELATED DOCUMENTS

2.7.1. A contract qualification certificate issued to a corporation certifies that the contract referred to in the certificate is recognized by the Minister as an eligible contract for the purposes of this chapter. It also specifies the qualified international financial operations and related activities that the corporation carries out or intends to carry out in connection with that contract.

2.7.2. In order for the Minister to recognize a contract as an eligible contract of a corporation, the Minister must be of the opinion that it is a contract entered into with a foreign financial entity and that the conditions of section 8.2 of the Act respecting international financial centres are met in respect of that contract.

2.7.3. A contract certificate issued to a corporation certifies that the contract referred to in the certificate is recognized by the Minister, for the purposes of this chapter, as an eligible contract of the corporation for the taxation year for which the application for the certificate is made or for the part of that year that is specified in the certificate.

2.7.4. The Minister may issue a contract certificate to a corporation if, for all or part of the taxation year for which the application for the certificate is filed,

(1) the contract qualification certificate issued to the corporation in respect of the contract is valid; and

(2) the Minister is of the opinion that

(a) the activities carried out by the corporation during that period on behalf of the foreign financial entity with which it entered into the contract correspond to the qualified international financial operations and related activities specified in the contract qualification certificate and that those operations were mainly the activities carried out by the corporation under the contract, and

(b) the services, including support, analysis, control and management, rendered by the corporation during that period are directly related to the business carried on by the foreign financial entity outside Canada and consist in services the corporation has not previously rendered in Québec on behalf of the entity or of a person not dealing at arm’s length with it.

DIVISION III

DOCUMENTS RELATING TO EMPLOYEES

2.8. An employee qualification certificate issued to a corporation certifies that the individual referred to in the certificate is recognized by the Minister as an eligible employee of the corporation for the purposes of this chapter.

2.9. In order for the Minister to recognize an individual as an eligible employee of a corporation, the Minister must be of the opinion that it may reasonably be expected that, from the date specified in the qualification certificate, the individual will be working full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks, and that his or her duties with the corporation

(1) will be devoted, in a proportion of at least 75%, to carrying out qualified international financial transactions as part of the operations of a business of the corporation that constitutes or is to constitute an international financial centre; or

(2) will be directly attributable, in a proportion of at least 75%, to the carrying out of the activities provided for in an eligible contract of the corporation.

2.10. An employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized by the Minister, for the purposes of this chapter, as an eligible employee of the corporation in relation to the carrying out of qualified international financial transactions or of activities provided for in the corporation’s eligible contract for the taxation year for which the application for the certificate was made or for the part of that taxation year that is specified in the certificate. If applicable, the certificate specifies the eligible contract to which the individual’s duties relate.

2.11. The Minister recognizes an individual as an eligible employee of the corporation if

(1) the employee qualification certificate that was issued to the corporation in respect of the individual is valid;

(2) the individual is working full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks; and

(3) the individual’s duties with the corporation were

(a) devoted, in a proportion of at least 75%, to carrying out qualified international financial transactions as part of the operations of a business of the corporation in respect of which a business qualification certificate was valid; or

(b) directly attributable, in a proportion of at least 75%, to the carrying out of the activities provided for in a contract that was entered into by the corporation and in respect of which a contract qualification certificate was valid. 

2.12. The duties of an individual with a corporation that are devoted to carrying out a qualified international financial transaction mean the duties that are directly attributable to the transactional process that is specific to the transaction.

However, unless they constitute in themselves a qualified international financial transaction, the individual’s duties that relate to legal affairs, communications, accounting, finance, taxation, corporate management, human and physical resources management, electronic data processing, marketing, messenger services, reception work or secretarial work do not constitute duties that are directly attributable to the transactional process that is specific to a qualified international financial transaction.

2.13. 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 eligible employee of a corporation, consider that the individual continued to perform his or her duties throughout the period of absence exactly as he or she was performing them before the beginning of that period.

DIVISION IV

SPECIAL RULES

2.14. The Minister is justified in revoking a business qualification certificate issued under this chapter or a similar qualification certificate issued under the Act respecting international financial centres if the Minister is of the opinion that the activities engaged in, in the course of the business referred to in the certificate, by the corporation or the partnership that obtained it are no longer in compliance with the provisions or the objectives of that Act, whether or not the corporation or partnership contravened the provisions of that Act or of this Act.

2.15. The effective date of the revocation of a qualification certificate or certificate issued under this chapter, or of a similar document issued under the Act respecting international financial centres, may not precede the date of the notice of revocation by more than four years.

2.16. The Minister may, before issuing a qualification certificate or a certificate under this chapter or before amending or revoking such a document or a similar document issued under the Act respecting international financial centres, obtain the advice of CFI Montréal — Centre Financier International or of any other body pursuing similar objectives.

CHAPTER III

SECTORAL PARAMETERS OF DEDUCTION RELATING TO FOREIGN SPECIALISTS ASSIGNED TO OPERATIONS OF INTERNATIONAL FINANCIAL CENTRE

DIVISION I

INTERPRETATION AND GENERAL

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

“back-office activities” has the meaning assigned by section 4 of the Act respecting international financial centres;

“business certificate” means a certificate referred to in subparagraph 1 of the second paragraph of section 2.2 or 9.3 or in section 12 of the Act respecting international financial centres;

“business qualification certificate” means a qualification certificate referred to in subparagraph 1 of the first paragraph of section 2.2 or 9.3 or in section 10 of the Act respecting international financial centres;

“eligible contract” of an eligible employer means a contract that is recognized as such, according to the following documents that were issued to the employer in respect of the contract:

(1) the contract qualification certificate referred to in subparagraph 1.1 of the first paragraph of section 2.2; and

(2) the contract certificate referred to in subparagraph 1.1 of the second paragraph of section 2.2 for the taxation year of the employer for which this definition is applied;

“eligible employer” means a corporation or a partnership operating a business that is recognized as an international financial centre, according to the following documents that were issued in its respect:

(1) the business qualification certificate; and

(2) the business certificate for the taxation year of the corporation or for the fiscal period of the partnership for which this definition is applied;

“foreign specialist tax holiday” means the fiscal measure provided for in subdivision 1 of Division III of Chapter V of the Act respecting international financial centres and in sections 737.16 and 737.18 of the Taxation Act, under which an individual may deduct an amount in computing the individual’s taxable income for a taxation year;

“international financial centre” means a business described in section 6 of the Act respecting international financial centres;

“international financial transaction” has the meaning assigned by section 4 of the Act respecting international financial centres;

“strategic personnel” has the meaning assigned by section 4 of the Act respecting international financial centres.

For the purposes of the definition of “eligible employer” in the first paragraph, the following presumptions apply to a corporation or a partnership in respect of the qualification certificate or the certificate issued to it and referred to in that definition:

(1) if the qualification certificate is revoked retroactively,

(a) it is deemed to be valid until the date of issue of the notice of revocation, and

(b) the corporation or partnership is deemed to hold, in respect of the business to which the qualification certificate relates, for the taxation year or the fiscal period in which it was revoked, a valid business certificate for the period corresponding to the part of that year or of that fiscal period that ends on that date of issue; and

(2) a revoked certificate is deemed to be valid for the whole taxation year or for the whole fiscal period for which it had been issued.

3.2. In order for an individual who works for an eligible employer to benefit from the foreign specialist tax holiday, the eligible employer must obtain the following documents from the Minister:

(1) a qualification certificate in respect of the individual (in this chapter referred to as a “specialist qualification certificate”); and

(2) a certificate in respect of the individual (in this chapter referred to as a “specialist certificate”).

A certificate referred to in this section must be obtained for each taxation year for which the eligible employer wishes an individual who is working for it to be allowed to claim the foreign specialist tax holiday.

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

However, the Minister may, if the Minister considers that the circumstances so warrant, allow such an application to be filed after the expiry of that time limit.

DIVISION II

DOCUMENTS RELATING TO SPECIALISTS

3.3. A specialist qualification certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized by the Minister as a specialist in respect of the eligible employer. The Minister specifies the period of validity of the certificate in the certificate, which period may not exceed five years.

3.4. In order for the Minister to recognize an individual as a specialist in respect of an eligible employer, the Minister must be of the opinion that the individual is a specialist in the field of international financial transactions or in a field relating to the activities provided for in one or more eligible contracts of the employer and that it may reasonably be expected that 

(1) from the date on which the individual takes up employment with the employer to the end of the period of validity specified in the qualification certificate,

(a) the individual’s duties with the employer will be devoted, in a proportion of at least 75%, to the operations of a business of the employer that constitutes or is to constitute an international financial centre, other than back-office activities or activities provided for in an eligible contract, or

(b) the individual will be a member of the strategic personnel of the business described in subparagraph a and the individual’s duties with the employer will be devoted, in a proportion of at least 75%, to the operations of that business; and

(2) in the case of an individual who has become or is to become resident in Canada to establish an international financial centre of the employer in Canada,

(a) the individual’s duties with the person or partnership for which the individual will be working during the period of establishment of the international financial centre will be devoted, during that period, in a proportion of at least 75%, to the establishment of the international financial centre,

(b) the individual will take up employment with the employer within 12 months after the day on which the individual becomes resident in Canada to establish the international financial centre of the employer, and

(c) from the date on which the individual takes up employment with the employer to the end of the period of validity specified in the qualification certificate,

i. the individual’s duties with the employer will be devoted, in a proportion of at least 75%, to the operations of the business of the employer that is to constitute an international financial centre, other than back-office activities or activities provided for in an eligible contract, or

ii. the individual will be a member of the strategic personnel of the business described in subparagraph i and the individual’s duties with the employer will be devoted, in a proportion of at least 75%, to the operations of that business.

3.5. A specialist certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized by the Minister as a specialist in respect of the eligible employer for the taxation year for which the application for the certificate is made or for the part of the year specified in it.

3.6. The Minister recognizes an individual as a specialist in respect of an eligible employer for all or a part of the individual’s taxation year for which an application for a certificate was filed with the Minister if

(1) the specialist qualification certificate, or the qualification certificate referred to in section 14 of the Act respecting international financial centres, issued to the employer in respect of the individual is valid in respect of the year or part of year; and

(2) throughout the year or part of year,

(a) the individual’s duties with the person or partnership referred to in subparagraph a of subparagraph 2 of the first paragraph of section 66 of the Act respecting international financial centres were devoted, in a proportion of at least 75%, to the establishment of the business which is to constitute an international financial centre of the employer,

(b) the individual’s duties with the employer were devoted, in a proportion of at least 75%, to the operations of a business of the employer, other than back-office activities or activities provided for in an eligible contract, in respect of which a business qualification certificate issued to the employer was valid, or

(c) the individual’s duties with the employer were devoted, in a proportion of at least 75%, to the operations of the business described in subparagraph b and the individual was a member of the strategic personnel of that business.

3.7. 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 a specialist 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 before the beginning of that period.

3.8. An eligible employer to which a specialist certificate is issued for a taxation year under this chapter 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.

DIVISION III

SPECIAL RULES

3.9. The effective date of the revocation of a qualification certificate that is a specialist qualification certificate or a qualification certificate issued under section 14 or 15 of the Act respecting international financial centres may not precede the date of the notice of revocation by more than four years. The same applies in the case of the revocation of a certificate that is a specialist certificate or a certificate issued under section 19 or 20 of that Act.

3.10. The Minister may, before issuing a qualification certificate or a specialist certificate, or before revoking such a document or a document issued under any of sections 14, 15, 19 and 20 of the Act respecting international financial centres, obtain the advice of CFI Montréal — Centre Financier International or of any other body pursuing similar objectives.

CHAPTER IV

(Repealed)

DIVISION I

(Repealed)

4.1. (Repealed).

4.2. (Repealed).

4.3. (Repealed).

4.4. (Repealed).

4.5. (Repealed).

DIVISION II

(Repealed)

4.6. (Repealed).

4.7. (Repealed).

4.8. (Repealed).

4.9. (Repealed).

4.10. (Repealed).

4.11. (Repealed).

4.12. (Repealed).

DIVISION III

(Repealed)

4.13. (Repealed).

4.14. (Repealed).

4.15. (Repealed).

4.16. (Repealed).

4.17. (Repealed).

CHAPTER V

SECTORAL PARAMETERS OF DEDUCTION RELATING TO FOREIGN SPECIALIST IN SERVICE OF STOCK EXCHANGE OR SECURITIES CLEARING-HOUSE

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible activities” of a recognized business carried on by an eligible employer in a taxation year means the activities relating to the operations carried out in the course of the recognized business;

“eligible employer” for a taxation year means a corporation that declares to the Minister that it

(1) carries on a recognized business in Québec in the year;

(2) carries out eligible activities of that recognized business in an establishment located within the urban agglomeration of Montréal; and

(3) pays employees of an establishment located in Québec more than 50% of the wages it pays in the year;

“foreign specialist tax holiday” means the fiscal measure provided for in Title VII.2.6 of Book IV of Part I of the Taxation Act, which allows an individual to deduct an amount in computing his or her taxable income for a taxation year under section 737.18.34 of that Act;

“recognized business” has the meaning assigned by the first paragraph of section 737.18.29 of the Taxation Act;

“urban agglomeration of Montréal” means the urban agglomeration described in section 4 of the Act respecting the exercise of certain municipal powers in certain urban agglomerations (chapter E-20.001).

In determining, for the purposes of the definition of “eligible employer” in the first paragraph, the proportion of wages an employer pays employees of an establishment located in Québec, the corporation must observe the rules set out in the fourth paragraph of section 737.18.29 of the Taxation Act.

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

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

DIVISION II

SPECIALIST CERTIFICATE

5.3. A specialist certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized as a specialist in respect of the employer for the taxation year for which the application for the certificate is made or for the part of the year specified in it.

5.4. An individual may be recognized as a specialist in respect of an eligible employer if

(1) the individual works full-time for the employer, that is, at least 26 hours per week, for an expected minimum period of 40 weeks;

(2) the individual’s duties with the employer consist exclusively or almost exclusively, on a continuous basis, in undertaking, supervising or directly supporting work related to the eligible activities of a recognized business carried on by the employer; and

(3) the individual performs his or her duties in an establishment of the employer located within the urban agglomeration of Montréal where the employer’s recognized business is carried on, or elsewhere but in connection with his or her work relating to such an establishment.

5.5. 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 a specialist 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.

5.6. An eligible employer to which a specialist 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 VI

SECTORAL PARAMETERS OF TAX CREDITS FOR NEW FINANCIAL SERVICES CORPORATIONS

DIVISION I

INTERPRETATION AND GENERAL

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

“adviser” means an adviser within the meaning of section 3 of the Derivatives Act (chapter I-14.01) or section 5 of the Securities Act (chapter V-1.1), authorized to act in that capacity under those Acts;

“dealer” means a dealer within the meaning of section 3 of the Derivatives Act or section 5 of the Securities Act, authorized to act in that capacity under those Acts;

“security” means a derivative within the meaning of section 3 of the Derivatives Act or any of the forms of investment listed in section 1 of the Securities Act, except a share in an investment club;

“tax credit for new financial services corporations” means

(1) the tax credit for the hiring of employees by new financial services corporations; or

(2) the tax credit relating to new financial services corporations;

“tax credit for the hiring of employees by new financial services corporations” means the fiscal measure provided for in Division II.6.14.4 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 credit relating to new financial services corporations” means the fiscal measure provided for in Division II.6.14.5 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.

6.2. To benefit from a tax credit for new financial services corporations, a corporation must obtain the following documents from the Minister:

(1) a qualification certificate in respect of the activities carried on, or to be carried on, by the corporation (in this chapter referred to as a “corporation qualification certificate”); and

(2) a certificate in respect of the activities carried on by the corporation (in this chapter referred to as a “corporation certificate”).

In addition, where the tax credit is the tax credit for the hiring of employees by new financial services corporations, the corporation must also obtain from the Minister a certificate in respect of each individual for whom the corporation claims the tax credit (in this chapter referred to as an “employee certificate”).

The corporation qualification certificate may be obtained only once. It is valid for five years unless the corporation that obtains it is associated, in the taxation year in which it files an application for the certificate, with one or more other corporations, in which case it is valid until the last day of the five-year period that begins on the earliest of the dates of coming into force of the corporation qualification certificates that are issued to the corporations so associated. However, where, at any time in a taxation year, the corporation begins to carry on an activity or part of an activity transferred to it by the particular corporation referred to in section 6.4.1, the period of validity of the corporation qualification certificate issued to the corporation may not end after the day on which the period of validity of the corporation qualification certificate issued to the particular corporation in respect of that activity or part of activity would otherwise have ended.

An application for a corporation qualification certificate must be filed with the Minister before the end of the corporation’s second taxation year, but on or before 31 December 2022. However, a corporation whose first taxation year begins after 20 March 2010 and whose second taxation year ends before 1 July 2013 may file such an application on or before 30 June 2013.

A corporation certificate must be obtained for each taxation year for which the corporation intends to avail itself of a tax credit for new financial services corporations. Similarly, the employee certificate must be obtained for each taxation year for which the corporation intends to benefit from the tax credit for the hiring of employees by new financial services corporations.

If, at a particular time, the Minister revokes a corporation qualification certificate issued to the corporation, any corporation certificate or employee certificate issued to the corporation for a taxation year subsequent to a given taxation year that includes the date on which the revocation becomes effective 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. Such a certificate issued to the corporation for the given taxation year is also deemed to be revoked by the Minister at the particular time, except that the effective date of its deemed revocation is the date specified in the notice of revocation of the corporation qualification certificate.

DIVISION II

DOCUMENTS RELATING TO A CORPORATION

6.3. A corporation qualification certificate issued to a corporation certifies that all the activities specified in the certificate that are carried on, or to be carried on, by the corporation are recognized as eligible activities.

The date of coming into force of the corporation qualification certificate may not precede the date the application for the certificate was made.

6.4. The Minister may issue a corporation qualification certificate only if

(1) the net shareholders’ equity of the corporation for its taxation year preceding that in which the corporation files its application for the certificate or, where the corporation is in its first fiscal period, at the beginning of that fiscal period, is less than $15,000,000; and

(2) the corporation establishes to the Minister’s satisfaction that the activities that are carried on, or to be carried on, by the corporation are not a continuation of activities or a part of activities previously carried on by another person or partnership.

However, the net shareholders’ equity of a corporation that is associated with one or more other corporations in the taxation year of the application corresponds to the aggregate of all of the corporation’s net shareholders’ equities and of those of each of the other corporations with which the corporation is associated, minus the total of equity investments those corporations have in one another.

For the purposes of this section, a corporation’s net shareholders’ equity means the net shareholders’ equity shown in the corporation’s financial statements submitted to the shareholders or, where such financial statements have not been prepared, or have not been prepared in accordance with generally accepted accounting principles, that would be shown if such financial statements had been so prepared.

6.4.1. If, at a particular time, a particular corporation transfers to another corporation an activity or part of an activity specified in the unrevoked corporation qualification certificate that was issued to the particular corporation, the activity or part of activity so transferred is deemed, for the purpose of applying subparagraph 2 of the first paragraph of section 6.4 in respect of the other corporation, not to have been carried on by the particular corporation before that time. In addition, the Minister specifies the activity or part of activity so transferred in the corporation qualification certificate issued to the other corporation and withdraws it from the corporation qualification certificate that was issued to the particular corporation. These modifications become effective at that time.

6.5. The following activities are eligible activities:

(1) an analysis, research, management, advisory and securities trading service or securities distribution, carried out by a securities dealer who is

(a) an investment dealer,

(b) a derivatives dealer,

(c) a mutual fund dealer,

(d) an exempt market dealer, or

(e) a restricted dealer; and

(2) a securities advisory or securities portfolio management service provided by a securities adviser who is

(a) a portfolio manager,

(b) a restricted portfolio manager,

(c) a derivatives portfolio manager, or

(d) an investment fund manager.

6.6. A corporation certificate issued to a corporation certifies that all the activities it carried out throughout the taxation year for which the application for the certificate is filed, or for the part of that year specified in the certificate, are activities mentioned in the corporation qualification certificate it obtained.

6.7. The Minister may issue a corporation certificate to a corporation if, for all or part of the taxation year for which the application for the certificate is filed,

(1) the corporation qualification certificate issued to the corporation was valid;

(2) it is established to the Minister’s satisfaction that all or substantially all of the activities the corporation carried out consisted in a provision of services to clients with whom the corporation was dealing at arm’s length; and

(3) it is established to the Minister’s satisfaction that all or substantially all of the activities the corporation carried out consisted in activities or parts of activities not previously carried on by another person or partnership.

For the purposes of subparagraph 2 of the first paragraph, services rendered by a corporation as a manager of an investment fund that is a trust or a limited partnership are deemed to be services rendered to a client with whom the corporation is dealing at arm’s length where, at no time in all or part of the taxation year for which the application for the certificate is filed, more than 10% of the securities held by the investment fund are owned, alone or collectively, by the corporation or by a person or partnership with whom the corporation is not dealing at arm’s length, other than the trust or limited partnership, as the case may be.

If an activity or part of an activity was the subject at a particular time of a transfer referred to in section 6.4.1 and made by a particular corporation, the activity or part of activity is deemed, for the purposes of subparagraph 3 of the first paragraph, not to have been carried on by the particular corporation before that time.

DIVISION III

DOCUMENT RELATING TO AN EMPLOYEE

6.8. An employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized as an eligible employee of the corporation for the taxation year for which the application for the certificate is made or for the part of that year that is specified in the certificate.

6.9. An individual may be recognized as an eligible employee of a corporation, if

(1) the individual works full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks; and

(2) at least 75% of the individual’s working time is spent performing, in an establishment of the corporation situated in Québec, duties directly attributable to the transactional process that is specific to the carrying out of activities specified in the corporation qualification certificate that was issued to the corporation.

For the purposes of subparagraph 2 of the first paragraph, the duties of an individual that relate to corporate management, finance activities other than those specified in the corporation qualification certificate, accounting, taxation, legal affairs, marketing, communications, reception work, secretarial work, messenger services, electronic data processing or human and physical resources management may not be considered to be part of duties directly attributable to the transactional process that is specific to the carrying out of activities specified in the corporation qualification certificate.

6.10. 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 eligible employee of a corporation, 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.

CHAPTER VII

SECTORAL PARAMETERS OF DEDUCTION RELATING TO FOREIGN SPECIALISTS WORKING IN FINANCIAL SERVICES SECTOR

DIVISION I

INTERPRETATION AND GENERAL

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

“corporation certificate” has the meaning assigned by subparagraph 2 of the first paragraph of section 6.2;

“corporation qualification certificate” has the meaning assigned by subparagraph 1 of the first paragraph of section 6.2;

“eligible employer” for a taxation year means a corporation in respect of which the following conditions are met:

(1) a corporation qualification certificate has been issued to the corporation; and

(2) either a corporation certificate is issued to the corporation for the year, or the corporation would meet the conditions for obtaining such a certificate for the year but for the expiry of the period of validity specified in the corporation qualification certificate;

“foreign specialist tax holiday” means the fiscal measure provided for in Title VII.3.1.1 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.

For the purposes of the definition of “eligible employer” in the first paragraph, the following presumptions must be taken into consideration:

(1) if the corporation qualification certificate that was issued to a corporation is revoked retroactively,

(a) it is deemed to be valid until the date of issue of the notice of revocation, and

(b) the corporation is deemed to hold for the particular taxation year in which it was revoked and for the preceding taxation year valid corporation certificates that cover that preceding year and the part of the particular year that ends on that date of issue, respectively; and

(2) if a corporation certificate is revoked, it is deemed to be valid for the whole taxation year for which it had been issued.

The presumption provided for in subparagraph b of subparagraph 1 of the second paragraph applies to either of the taxation years referred to in that subparagraph only if the sole reason for which the eligible employer was not issued a corporation certificate for the year is that the corporation qualification certificate that was issued to the employer has been revoked.

7.2. In order for an individual who works for an eligible employer to benefit from the foreign specialist tax holiday, the eligible employer must obtain the following documents from the Minister:

(1) a qualification certificate in respect of the individual (in this chapter referred to as a “specialist qualification certificate”); and

(2) a certificate in respect of the individual (in this chapter referred to as a “specialist certificate”).

A specialist certificate must be obtained for each taxation year for which the individual may claim the tax holiday.

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

However, an application for a specialist qualification certificate or a specialist certificate is admissible only if the employment contract binding the individual to the employer was entered into before the expiry of the period of validity specified in the corporation qualification certificate that was issued to the employer.

For the purposes of this chapter, a contract resulting from the renewal of an employment contract referred to in the fourth paragraph and in this section referred to as the “original contract” is deemed not to be an employment contract separate from the original contract.

DIVISION II

DOCUMENTS RELATING TO SPECIALISTS

7.3. A specialist qualification certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized by the Minister as a specialist in respect of the eligible employer.

7.4. In order for the Minister to recognize an individual as a specialist in respect of an eligible employer, the Minister must be of the opinion that the individual is a professional with a high level of expertise in the field of finance and that, from the date on which the individual takes up employment with the employer, it may reasonably be expected that the individual spends at least 75% of working time performing duties that are directly attributable to the transactional process that is specific to the carrying out of the activities specified in the corporation qualification certificate issued to the employer.

For the purposes of the first paragraph, an individual’s duties that relate to corporate management, finance activities other than those specified in the corporation qualification certificate, accounting, taxation, legal affairs, marketing, communications, reception work, secretarial work, messenger services, electronic data processing or human or physical resources management are not to be considered as part of duties directly attributable to the transactional process that is specific to the carrying out of activities specified in the corporation qualification certificate.

7.5. A specialist certificate issued to an eligible employer certifies that the individual referred to in the certificate is recognized by the Minister as a specialist in respect of the eligible employer for the taxation year for which the application for the certificate is made or for the part of the year specified in it.

7.6. The Minister recognizes an individual as a specialist in respect of an eligible employer for all or a part of the taxation year for which an application for a specialist certificate was filed with the Minister if

(1) the specialist qualification certificate issued to the employer in respect of the individual is valid in respect of the year or part of year; and

(2) throughout the year or part of year, at least 75% of the individual’s working time was devoted to the performance of duties that are directly attributable to the transactional process that is specific to the carrying out of the activities specified in the corporation qualification certificate issued to the employer.

The second paragraph of section 7.4 applies to subparagraph 2 of the first paragraph, with the necessary modifications.

7.7. 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 a specialist 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.

7.8. An eligible employer to which a specialist certificate is issued for a taxation year must promptly send a copy of the certificate to the individual concerned.

CHAPTER VIII

SECTORAL PARAMETERS OF FISCAL MEASURES RELATING TO CARRYING OUT OF A LARGE INVESTMENT PROJECT

DIVISION I

INTERPRETATION AND GENERAL

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

“designated region” means

(1) any of the following regions or parts of a region:

(a) the Abitibi-Témiscamingue region,

(b) the Bas-Saint-Laurent region,

(c) the Côte-Nord region,

(d) the Gaspésie–Îles-de-la-Madeleine region,

(e) the Nord-du-Québec region,

(f) the Saguenay–Lac-Saint-Jean region,

(g) the part of the Estrie region that includes the territories of the regional county municipalities of Granit and Haut-Saint-François,

(h) the part of the Mauricie region that includes the territories of the urban agglomeration of La Tuque and Municipalité régionale de comté de Mékinac, or

(i) the part of the Outaouais region that includes the territories of the regional county municipalities of Pontiac and La Vallée-de-la-Gatineau; or

(2) any of the following regional county municipalities:

(a) Municipalité régionale de comté d’Antoine-Labelle, or

(b) Municipalité régionale de comté de Charlevoix-Est;

“start-up period” of an investment project means the 60-month period that begins on

(1) the date on which the qualification certificate referred to in the first paragraph of section 8.3 is issued to a corporation or a partnership in relation to the project; or

(2) in the case of a second investment project, referred to in section 8.3.2, the date on which the qualification certificate amended following an application filed in accordance with that section is issued to the corporation or partnership;

“tax-free period” of a corporation or a partnership, in relation to an investment project, means the 15-year period that begins on the date specified for that purpose by the Minister in the first certificate referred to in the second paragraph of section 8.3 that is issued to the corporation or partnership in respect of the project;

“tax holiday relating to the carrying out of a large investment project” means any of the following fiscal measures from which a corporation holding a qualification certificate referred to in the first paragraph of section 8.3, a corporation that is a member of a partnership holding such a qualification certificate or, if the measure is the measure described in paragraph 2, any other person who is a member of such a partnership, may benefit:

(1) the fiscal measure provided for in Title VII.2.3.1 of Book IV of Part I of the Taxation Act, under which the corporation may deduct an amount in computing its taxable income for a taxation year; and

(2) the fiscal measure provided for in sections 33, 34, 34.1.0.3 and 34.1.0.4 of the Act respecting the Régie de l’assurance maladie du Québec, which allows the corporation or the other person to obtain a contribution exemption under subparagraph d.1 of the seventh paragraph of section 34 of that Act.

8.2. For the purposes of this Act and despite sections 1175.28.15 and 1175.28.17 of the Taxation Act, every person who is a member of a partnership holding the qualification certificate referred to in the first paragraph of section 8.3 is considered to be the person benefiting from or availing himself, herself or itself of the fiscal measure described in paragraph 2 of the definition of “tax holiday relating to the carrying out of a large investment project” in section 8.1, according to the agreed proportion in respect of the person for the fiscal period of the partnership that ends in the person’s taxation year for which the measure applies.

8.2.1. The Minister may suspend the start-up period of an investment project if the Minister is of the opinion that the corporation or partnership, as the case may be, may not begin or continue the carrying out of the project without having obtained an authorization from the Gouvernement du Québec or the Government of Canada, one of their ministers or bodies, or a municipality in Québec, and that the circumstances so warrant. The Minister must notify the corporation or partnership of the date on which the suspension begins and of the date from which the start-up period begins to run again.

8.3. To benefit from a tax holiday relating to the carrying out of a large investment project, in respect of an investment project, a corporation or, if it claims the tax holiday as a member of a partnership, the partnership must obtain a qualification certificate in respect of the project (in this chapter referred to as an “initial qualification certificate”) from the Minister.

In addition, the corporation or partnership must, for that purpose, obtain a certificate in respect of the investment project (in this chapter referred to as an “annual certificate”) from the Minister. Such a certificate must be obtained, as applicable, for each taxation year in which the corporation intends to claim, in respect of the project, a tax holiday relating to the carrying out of a large investment project, or for each fiscal period of the partnership that ends in such a taxation year, provided that the year or fiscal period is included in whole or in part in the corporation’s or partnership’s tax-free period in relation to the project.

The documents referred to in the first and second paragraphs that are obtained by a partnership are also required in order for a person, other than a corporation, who is a member of the partnership to avail himself, herself or itself of the fiscal measure referred to in paragraph 2 of the definition of “tax holiday relating to the carrying out of a large investment project” in section 8.1.

8.3.1. An application for an initial qualification certificate in respect of an investment project must, subject to subparagraph 4 of the first paragraph of section 8.4, be filed with the Minister before the investment project begins to be carried out and on or before 31 December 2024.

The corporation’s or partnership’s commitments in respect of an investment project are taken into account in determining the date on which the project began to be carried out. However, commitments related to market or feasibility studies are not sufficient in themselves to consider that the investment project has begun to be carried out.

8.3.2. Despite the first and third paragraphs of section 8.3, a corporation or a partnership may file with the Minister an application to amend an initial qualification certificate it was issued in respect of a particular investment project to have it refer to a second investment project as well. To grant the application, the Minister must be of the opinion that the latter project is an extension of the former.

The application for an amendment must be filed on or before the day on which the first annual certificate is applied for in respect of the first investment project and before the earlier of

(1) the date on which the second investment project begins to be carried out; and

(2) 1 January 2025.

The application to amend the initial qualification certificate is deemed, for the purposes of this Act, to be an application for such a qualification certificate in respect of the second investment project and the issuance criteria provided for in Division II apply with the necessary modifications. In addition, the second paragraph of section 8.3.1 applies to the second paragraph of this section.

8.3.3. An application for an annual certificate in respect of an investment project must be filed with the Minister within 15 months after the end of the taxation year or fiscal period for which it is made.

However, where the Minister considers that the circumstances so warrant, the Minister may grant such an application despite the expiry of that time limit, provided that the application is filed on or before the last day of the 18th month following the end of the taxation year or fiscal period concerned.

The Minister may not issue an annual certificate to a corporation or a partnership in respect of an investment project for a particular taxation year or fiscal period unless, at the time the annual certificate is to be issued, the initial qualification certificate that the corporation or partnership, as the case may be, holds in relation to the project is still valid in its respect.

If, at a particular time, the Minister revokes the initial qualification certificate a corporation or a partnership holds in respect of an investment project, any annual certificate issued to the corporation or partnership in respect of the project for a taxation year or fiscal period that is subsequent to the given taxation year or fiscal period that includes the effective date of the revocation 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. The annual certificate issued in respect of the project for the given taxation year or fiscal period is also deemed to be revoked by the Minister at that time, except that the effective date of the deemed revocation is the date specified in the notice of revocation of the initial qualification certificate.

Where the initial qualification certificate a corporation or a partnership holds, following an application filed under section 8.3.2, in respect of a second investment project is amended to have it no longer refer to that project, the following rules must be taken into account for the purposes of the fourth paragraph:

(1) the initial qualification certificate is considered to be revoked, but only as regards the second investment project;

(2) the effective date of the revocation is the date of coming into force of the amendment; and

(3) where, in accordance with the first paragraph of section 8.11, a single annual certificate has been issued to the corporation or partnership in respect of the first and second investment projects, the deemed revocation of the certificate in respect of the second investment project, because of the application of the fourth paragraph, is considered to be a deemed amendment of the certificate that is made to have the certificate cease to be valid in respect of the second project.

8.4. If, at any given time in a particular taxation year or fiscal period, a corporation or partnership acquires from another corporation or partnership (in this section referred to as the “transferee” and the “transferor”, respectively) all or substantially all of the part that is carried on in Québec of the business in connection with which are carried on activities arising from the carrying out of an investment project that has been referred to in a first annual certificate and in respect of which the transferor holds a valid initial qualification certificate and, for the purposes of this chapter, the Minister agrees to the transfer of the carrying out of the investment project to the transferee, the following rules apply:

(1) the initial qualification certificate issued to the transferor is deemed to be revoked from that time;

(2) the annual certificate issued to the transferor in respect of the project for the particular year or fiscal period is also deemed to be revoked from that time;

(3) the first annual certificate issued or deemed, because of the application of this subparagraph, to have been issued to the transferor in respect of the project is, for the purposes of the definition of “tax-free period” in section 8.1 and of the first paragraph of section 8.10, deemed to have been issued to the transferee; and

(4) the Minister must issue an initial qualification certificate to the transferee in respect of the project, which comes into force at that time.

The Minister may agree to the transfer of the carrying out of the investment project to the transferee if the transferee undertakes to continue in Québec and, in the case of a project to which subparagraph c or c.1 of subparagraph 3 of the first paragraph of section 8.6 applies, in a designated region, the carrying out of all or substantially all of the project as submitted to and approved by the Minister at the time of the transfer.

Where, following an application filed by the transferor in accordance with section 8.3.2, two investment projects are referred to in an initial qualification certificate that was issued to the transferor, the following rules apply:

(1) the transfer of the carrying out of either of the investment projects may be authorized by the Minister in accordance with the second paragraph only if the Minister also authorizes the transfer of the other investment project to the same transferee;

(2) the requirement to be referred to in a first annual certificate, provided for in the portion of the first paragraph before subparagraph 1, is deemed to be met in respect of the second investment project if it is met in respect of the first; and

(3) the Minister issues to the transferee, in accordance with subparagraph 4 of the first paragraph, a single initial qualification certificate in respect of the two investment projects.

If the Minister issued a particular initial qualification certificate to a transferee under subparagraph 4 of the first paragraph in relation to the acquisition (in this paragraph referred to as the “particular acquisition”) by the transferee, at a given time, of all or substantially all of the part that is carried on in Québec of the particular business in connection with which activities arising from the carrying out of an investment project in respect of which that qualification certificate was issued are carried on and if, at a time subsequent to the given time, the Minister revokes or is deemed, because of the application of this paragraph, to have revoked the initial qualification certificate that refers to that project and that was issued to the transferor involved in the particular acquisition, the particular qualification certificate is also deemed to have been revoked by the Minister at that subsequent time. The effective date of the deemed revocation is the date of coming into force of the particular qualification certificate. This rule also applies, with the necessary modifications, to the amendment made to an initial qualification certificate to have it no longer refer to a second investment project referred to in section 8.3.2.

DIVISION II

INITIAL QUALIFICATION CERTIFICATE

8.5. An initial qualification certificate issued to a corporation or a partnership, as the case may be, states that the investment project referred to in the certificate will likely be recognized as a large investment project. The certificate is made to state the same in respect of a second investment project for which an application was filed in accordance with section 8.3.2 and granted by the Minister.

Where the qualification certificate is issued under subparagraph 4 of the first paragraph of section 8.4, it also specifies that the Minister authorizes the transfer of the carrying out of any investment project referred to in the qualification certificate to the corporation or partnership and states the date of the beginning of the tax-free period, in relation to the project, that is mentioned in the first annual certificate that, if applicable, was obtained in its respect and that is deemed to have been issued to the corporation or partnership under subparagraph 3 of the first paragraph of that section. 

8.6. The Minister issues an initial qualification certificate in respect of an investment project to a corporation or a partnership if

(1) the project is to be carried out after 20 November 2012 and the corporation or partnership shows, to the Minister’s satisfaction, that the activities arising from the project will be carried on in Québec;

(2) subject to the second paragraph, the project concerns activities in

(a) the manufacturing sector described under codes 31 to 33 of the North American Industry Classification System (NAICS) Canada, as amended from time to time and published by Statistics Canada, which code is in this subparagraph 2 referred to as the “NAICS code”,

(b) the wholesale trade sector described under NAICS code 41,

(c) the warehousing and storage group described under NAICS code 4931, or

(d) the data processing, hosting, and related services subsector described under NAICS code 518; and

(e) the digital platform development sector; and

(3) the corporation or partnership shows, to the Minister’s satisfaction, that it is likely that, as a result of the carrying out of the project, not later than the end of the start-up period of the project, the total capital investments attributable to its carrying out will reach at least

(a) $300,000,000, if the corporation or partnership files its application for the initial qualification certificate before 8 October 2013 and, where the carrying out of the project has not yet begun before that date, does not elect to have any of the thresholds provided for in subparagraphs b, c and d apply,

(b) $200,000,000, if the corporation or partnership either files its application for the initial qualification certificate after 7 October 2013 and before 11 February 2015 or, where it files the application before 8 October 2013 and the carrying out of the project has not yet begun before that date, elects, in accordance with the seventh paragraph, to have the threshold provided for in this subparagraph apply, and if, where the carrying out of the project has not yet begun before 11 February 2015, it does not elect to have any of the thresholds provided for in subparagraphs c to d apply,

(c) $75,000,000, if

i. it is determined that the project must be carried out in a designated region,

ii. the corporation or partnership either files its application for the initial qualification certificate after 10 February 2015 and before 22 March 2019 or, where it files its application before 11 February 2015 and the carrying out of the project has not yet begun before that date, elects, in accordance with the seventh paragraph, to have the threshold provided for in this subparagraph c apply, and

iii. where the carrying out of the project has not yet begun before 22 March 2019, the corporation or partnership does not elect to have the threshold provided for in subparagraph c.1 apply,

(c.1) $50,000,000, if it is determined that the project must be carried out in a designated region and the corporation or partnership either files its application for the initial qualification certificate after 21 March 2019 or, where it files its application before 22 March 2019 and the carrying out of the project has not yet begun before that date, elects, in accordance with the seventh paragraph, to have the threshold provided for in this subparagraph c.1 apply, or

(d) $100,000,000, if neither subparagraph c nor c.1 applies and the corporation or partnership either files its application for the initial qualification certificate after 10 February 2015 or, where it files its application before 11 February 2015 and the carrying out of the project has not yet begun before that date, elects, in accordance with the seventh paragraph, to have the threshold provided for in this subparagraph apply.

Mineral substance processing activities are excluded from the activities described in subparagraph 2 of the first paragraph.

Any mineral substance concentration activity, including any pelletization, as well as any activity involving the smelting, refining or hydrometallurgy of ore from a gold or silver mine is considered to be a mineral substance processing activity.

For the purposes of the third paragraph, “hydrometallurgy” means any processing of an ore or concentrate that produces a metal, metallic salt or metallic compound by carrying out a chemical reaction in an aqueous or organic solution.

A computer environment that enables content management or use and that, as an intermediary, enables access to information, services or property supplied or edited by the corporation or partnership operating it or by a third party, constitutes a digital platform.

However, the development activities of a digital platform that hosts, or is intended to host, content encouraging violence, sexism, racism or any other form of discrimination, supporting an illegal activity, comprising explicit sex scenes or proposing online gambling are excluded from the activities of the sector referred to in subparagraph e of subparagraph 2 of the first paragraph, regardless of the source or nature of such content.

The corporation or partnership makes any of the elections provided for in subparagraphs b, c, c.1 and d of subparagraph 3 of the first paragraph by notifying the Minister in writing before the day on which it files its application for the first annual certificate in respect of the investment project, but on or before 20 November 2015 in the case of an election provided for in that subparagraph b, 20 November 2017 in the case of either of the elections provided for in those subparagraphs c and d, or 31 December 2020 in the case of an election provided for in that subparagraph c.1.

8.6.1. An investment project is considered to be required to be carried out in a designated region if the corporation or partnership applying for the initial qualification certificate in respect of the project shows to the Minister’s satisfaction that all or substantially all of the project will be carried out in a designated region at or before the end of its start-up period and that the activities arising from the project will be carried out in such a region in the same proportion.

8.6.2. All or substantially all of an investment project is carried out in a designated region at a particular time if, at that time, all or substantially all of the amount corresponding to the total capital investments attributable to its carrying out consists of expenditures that were incurred for the acquisition of goods or services intended for an establishment situated in the designated region and belonging to the corporation or partnership carrying out the project.

8.7. The total capital investments attributable to the carrying out of an investment project, at a particular time, correspond to the aggregate of the expenditures of a capital nature incurred, from the beginning of the carrying out of the investment project until that time, to obtain goods or services with a view to establishing, in Québec, the business or part of the business in connection with which activities arising from the carrying out of the project are carried on, or with a view to increasing or modernizing the production of such a business or part of a business.

However, in computing the total capital investments attributable to the carrying out of an investment project, the capital investments that are related to the purchase or use of land or the acquisition of a business already carried on in Québec are not taken into account.

DIVISION III

ANNUAL CERTIFICATE

8.8. An annual certificate issued to a corporation or a partnership in respect of an investment project certifies that the corporation or partnership is continuing, in the taxation year or fiscal period, as the case may be, for which the application for the certificate is made, to carry out the investment project in respect of which it holds an initial qualification certificate. The certificate also confirms that the project is recognized for the year or fiscal period as a large investment project.

In the first annual certificate issued in respect of an investment project, the Minister specifies the date of the beginning of the corporation’s or partnership’s tax-free period in relation to the project. That date is the earlier of

(1) the day that follows the end of the start-up period; and

(2) the earlier of

(a) the date on which the corporation or partnership begins to carry on the activities arising from the carrying out of the project or, where the corporation or partnership gradually begins to carry on such activities, the date on which at least 90% of the goods intended to be used in the course of such activities are ready to be used, and

(b) the date on which the total capital investments attributable to the carrying out of the project is, for the first time, equal to or greater than

i. $300,000,000, if subparagraph a of subparagraph 3 of the first paragraph of section 8.6 applies to the project,

ii. $200,000,000, if subparagraph b of that subparagraph 3 applies to the project,

iii. $75,000,000, if subparagraph c of that subparagraph 3 applies to the project,

iv. $50,000,000, if subparagraph c.1 of that subparagraph 3 applies to the project, or

v. $100,000,000, if subparagraph d of that subparagraph 3 applies to the project.

The proportion of the goods ready to be used in the course of the activities arising from the carrying out of the project corresponds to the proportion that the part of the total capital investments attributable to the carrying out of the project that consists of the expenditures incurred by the corporation or partnership to acquire such goods is of the part of the total of such capital investments that consists of expenditures that the corporation or partnership planned to incur for the acquisition of such goods according to the information sent to the Minister for the purposes of subparagraph 3 of the first paragraph of section 8.6.

8.9. An annual certificate in respect of an investment project may be issued, for a particular taxation year or fiscal period, to a corporation or a partnership, as the case may be, if,

(1) the activities arising from the project are carried on in Québec and, if subparagraph c or c.1 of subparagraph 3 of the first paragraph of section 8.6 applies to the project, all or substantially all of the activities are carried on in a designated region;

(2) subject to the third paragraph, the total capital investments attributable to the carrying out of the project, at any time in the particular year or fiscal period, reaches at least

(a) $300,000,000, if subparagraph a of subparagraph 3 of the first paragraph of section 8.6 applies to the project,

(b) $200,000,000, if subparagraph b of that subparagraph 3 applies to the project,

(c) $75,000,000, if subparagraph c of that subparagraph 3 applies to the project,

(c.1) $50,000,000, if subparagraph c.1 of that subparagraph 3 applies to the project, or

(d) $100,000,000, if subparagraph d of that subparagraph 3 applies to the project; and

(3) where subparagraph c or c.1 of subparagraph 3 of the first paragraph of section 8.6 applies to the project, all or substantially all of the project is carried out in a designated region at any time in the particular year or fiscal period.

The Minister may not issue an annual certificate to a corporation or a partnership, in respect of an investment project, for a taxation year or fiscal period that is subsequent to the start-up period of the project unless the total capital investments attributable to the carrying out of the project has reached at least, at or before the end of that period, whichever of the amounts specified in subparagraphs a to d of the first paragraph applies to the project. In addition, the Minister may issue an annual certificate in respect of an investment project only for a taxation year or fiscal period that is included in whole or in part in the corporation’s or partnership’s tax-free period in relation to the project.

In addition, where a corporation’s taxation year or a partnership’s fiscal period is included only in part in the start-up period of an investment project, the first annual certificate, in relation to the investment project, may be issued for the year or fiscal period, as the case may be, only if the requirement of subparagraph 2 of the first paragraph is met for that part of the year or fiscal period. The same applies, where an annual certificate is to be issued for a taxation year or fiscal period that is included only in part in the corporation’s or partnership’s tax-free period, in relation to the investment project.

8.10. If, at a particular time, the first annual certificate that was issued to a corporation or a partnership for a particular taxation year or fiscal period, as the case may be, in respect of an investment project is revoked by the Minister, the following rules apply:

(1) the certificate is deemed never to have been issued;

(2) subject to the first sentence of the second paragraph of section 8.9, the Minister may, for a taxation year or fiscal period that is subsequent to the particular year or fiscal period, issue a first annual certificate to the corporation or partnership in respect of the project or amend an annual certificate that the Minister has already issued to it so that that certificate becomes the first annual certificate of the corporation or partnership if, for that subsequent year or fiscal period, the project meets the requirements of the first paragraph of section 8.9; and

(3) any other annual certificate issued to the corporation or partnership in respect of the project for any taxation year or fiscal period, unless subsequent to the year or fiscal period for which a certificate referred to in subparagraph 2 was issued, if any, is deemed to be revoked by the Minister at that particular time.

The effective date of the deemed revocation under subparagraph 3 of the first paragraph is the date of coming into force of the annual certificate that is deemed to be revoked.

8.11. Where two investments projects are referred to in a single initial qualification certificate following an application filed in accordance with section 8.3.2, a single annual certificate is issued, in respect of those projects, to the corporation or partnership carrying them out for any taxation year or fiscal period, as the case may be, that is included in whole or in part in the particular period that begins at the beginning of the corporation’s or partnership’s tax-free period in relation to the second project and that ends at the end of its tax-free period in relation to the first project.

The annual certificate includes the particulars provided for in the first paragraph of section 8.8 in respect of each investment project. In the case of the first annual certificate of the second investment project, the portion of the certificate that refers to it states the date of the beginning of the corporation’s or partnership’s tax-free period in relation to that project in accordance with the second paragraph of that section.

In order for the annual certificate to be issued, the conditions of section 8.9 must be met in respect of each of the two investment projects.

8.12. Where an annual certificate that is the first certificate issued in respect of a second investment project is amended so as to revoke the portion of that certificate that concerns the investment project, section 8.10 applies to the amendment with the necessary modifications.

8.13. Where, in a taxation year of a corporation or a fiscal period of a partnership that ends before the beginning of its tax-free period in respect of a second investment project referred to in section 8.3.2, the corporation or partnership carries on activities arising from the carrying out of that project and the condition of paragraph 1 of section 8.9 is met in respect of those activities, the Minister must state, in the annual certificate the Minister issues to the corporation or partnership for the taxation year or fiscal period in respect of the first investment project, that the corporation or partnership is also continuing to carry out the second investment project.

However, if at the end of the start-up period in respect of the second investment project the total capital investments attributable to the carrying out of the project has not reached at least whichever of the amounts specified in subparagraphs a to d of the first paragraph of section 8.9 applies to the project, the Minister must amend every annual certificate referred to in the first paragraph to withdraw the statement, retroactively to the date of coming into force of the certificate.

CHAPTER IX

SECTORAL PARAMETERS OF TAX CREDIT FOR INTERNATIONAL FINANCIAL CENTRES IN RESPECT OF ACTIVITIES OTHER THAN BACK-OFFICE ACTIVITIES

DIVISION I

INTERPRETATION AND GENERAL

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

“back-office activities” has the meaning assigned by section 4 of the Act respecting international financial centres;

“international financial centre” means a business described in section 6 of the Act respecting international financial centres;

“qualified international financial transaction” has the meaning assigned by sections 7 to 8 of the Act respecting international financial centres, except for back-office activities referred to in paragraph 22 of that section 7;

“specialized worker” of a corporation for a particular period means an individual who, in any of the individual’s taxation years during which the individual works for a corporation, is recognized as a specialist for a particular period of that taxation year, according to a certificate referred to in subparagraph 2 of the first paragraph of section 3.2 that was issued to the corporation;

“tax credit for international financial centres” means the fiscal measure provided for in Title III.5 of Book V of Part I of the Taxation Act, under which a corporation may deduct an amount in computing its tax payable under that Part for a taxation year;

“urban agglomeration of Montréal” has the meaning assigned by section 4 of the Act respecting international financial centres.

9.2. For the purposes of Divisions I to III, the following presumptions must be taken into consideration:

(1) if a corporation holds a valid qualification certificate referred to in subparagraph 1 of the first paragraph of section 2.2, in relation to an international financial centre, that was issued to the corporation for the purposes of Chapter II in respect of a taxation year of the corporation that begins before 27 March 2015, the qualification certificate is deemed to be a business qualification certificate referred to in subparagraph 1 of the first paragraph of section 9.3, in relation to the international financial centre; and

(2) if a corporation holds a valid qualification certificate referred to in subparagraph 2 of the first paragraph of section 2.2 that was issued to the corporation, in respect of an individual, for the purposes of Chapter II in respect of a taxation year of the corporation that begins before 27 March 2015, the qualification certificate is deemed to be an employee qualification certificate referred to in subparagraph 2 of the first paragraph of section 9.3 in respect of the individual.

9.3. A corporation that intends to operate an international financial centre within the urban agglomeration of Montréal and that wishes to benefit from the tax credit for international financial centres must obtain from the Minister

(1) a qualification certificate in respect of that business (in this chapter referred to as a “business qualification certificate”); and

(2) a qualification certificate in respect of each of the individuals for which it wishes to benefit from the tax credit (in this chapter referred to as an “employee qualification certificate”).

Moreover, to benefit from the tax credit, such a corporation must also obtain from the Minister

(1) a certificate in respect of that business (in this chapter referred to as a “business certificate”); and

(2) a certificate in respect of each of the individuals for which it claims the tax credit (in this chapter referred to as an “employee certificate”).

The certificates referred to in the second paragraph must be obtained for each taxation year for which the corporation intends to claim the tax credit for international financial centres.

DIVISION II

BUSINESS-RELATED DOCUMENTS

9.4. A business qualification certificate issued to a corporation certifies, subject to the Act respecting international financial centres, that the business referred to in the certificate is recognized as an international financial centre. It also specifies that the activities engaged in or to be engaged in in the course of carrying on the business pertain to qualified international financial transactions.

9.5. The Minister issues a business qualification certificate to a corporation if the Minister is of the opinion that the activities engaged in or to be engaged in by the corporation in the course of carrying on its business are in compliance with the provisions and objectives of the Act respecting international financial centres.

9.6. A business certificate issued to a corporation certifies that the business that is referred to in the certificate and that is carried on by the corporation in the taxation year for which the application for the certificate is filed is recognized for that year, or for the part of that year that is specified in the certificate, as an international financial centre. It also specifies that the activities engaged in in the course of carrying on the business pertain to qualified international financial transactions.

9.7. The Minister may issue a business certificate to a corporation if, for all or part of the taxation year for which the application for the certificate is filed,

(1) the business qualification certificate issued in respect of the business was valid; and

(2) the Minister is of the opinion that

(a) the activities of the business were related to qualified international financial transactions, and

(b) the activities of the business that are referred to in subparagraph a and, if applicable, the activities of another business of the corporation that are referred to in subparagraph a of subparagraph 2 of the first paragraph of section 2.6 required, at all times, the work of at least six individuals each of whom is recognized by the Minister as an eligible employee of the corporation, for all or part of the year or part of year, under an employee certificate or a certificate referred to in subparagraph 2 of the second paragraph of section 2.2 that the corporation obtained in respect of the employee for the year.

Where an individual is a specialized worker of the corporation for a particular period that begins or ends in a taxation year of the corporation, the following presumptions must be taken into account for the purposes of subparagraph b of subparagraph 2 of the first paragraph:

(1) the individual is deemed to have been recognized by the Minister as an eligible employee of the corporation for the part of the taxation year that is included in the particular period; and

(2) the corporation is deemed to have obtained an employee certificate in respect of the individual for the taxation year, under which the individual is so recognized.

9.8. If the condition of subparagraph b of subparagraph 2 of the first paragraph of section 9.7 is not met for a particular period of a taxation year for which a business qualification certificate issued to a corporation is valid, the Minister may nevertheless recognize the business for the particular period provided the corporation shows, to the Minister’s satisfaction, that the situation is temporary and due to exceptional circumstances that are beyond its control.

DIVISION III

DOCUMENTS RELATING TO EMPLOYEES

9.9. An employee qualification certificate issued to a corporation certifies that the individual referred to in the certificate is recognized by the Minister as an eligible employee of the corporation for the purposes of this chapter.

9.10. In order for the Minister to recognize an individual as an eligible employee of a corporation, the Minister must be of the opinion that it may reasonably be expected that, from the date specified in the qualification certificate, the individual will be working full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks, and that his or her duties with the corporation will be devoted, in a proportion of at least 75%, to carrying out qualified international financial transactions as part of the operations of a business of the corporation that constitutes or is to constitute an international financial centre.

9.11. An employee certificate issued to a corporation certifies that the individual referred to in the certificate is recognized by the Minister, for the purposes of this chapter, as an eligible employee of the corporation for the taxation year for which the application for the certificate was made or for the part of that taxation year that is specified in the application.

9.12. The Minister recognizes an individual as an eligible employee of a corporation if

(1) the employee qualification certificate that was issued to the corporation in respect of the individual is valid;

(2) the individual is working full-time for the corporation, that is, at least 26 hours per week, for an expected minimum period of 40 weeks; and

(3) the individual’s duties with the corporation were devoted, in a proportion of at least 75%, to carrying out qualified international financial transactions as part of the operations of a business of the corporation in respect of which a business qualification certificate was valid.

9.13. The duties of an individual with a corporation that are devoted to carrying out a qualified international financial transaction mean the duties that are directly attributable to the transactional process that is specific to the transaction.

However, unless they constitute in themselves a qualified international financial transaction, the individual’s duties that relate to legal affairs, communications, accounting, finance, taxation, corporate management, human and physical resources management, electronic data processing, marketing, messenger services, reception work or secretarial work do not constitute duties that are directly attributable to the transactional process that is specific to a qualified international financial transaction.

9.14. 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 eligible employee of a corporation, consider that the individual continued to perform his or her duties throughout the period of absence exactly as he or she was performing them before the beginning of that period.

DIVISION IV

SPECIAL RULES

9.15. The Minister is justified in revoking a business qualification certificate issued under this chapter if the Minister is of the opinion that the activities engaged in, in the course of carrying on the business referred to in the certificate, by the corporation that obtained it are no longer in compliance with the provisions or the objectives of the Act respecting international financial centres, whether or not the corporation contravened the provisions of the Act respecting international financial centres or of this Act.

9.16. The effective date of the revocation of a qualification certificate or certificate issued under this chapter may not precede the date of the notice of revocation by more than four years.

9.17. The Minister may, before issuing a qualification certificate or a certificate under this chapter or before amending or revoking such a document, obtain the advice of CFI Montréal — Centre Financier International or of any other body pursuing similar objectives.

2012, c. 1, Schedule E; 2013, c. 10, ss. 197 and 198; 2015, c. 21, ss. 567 to 573; 2015, c. 36, ss. 179 to 183; 2017, c. 1, ss. 404 to 421; 2017, c. 29, s. 231; 2019, c. 14, ss. 479 to 501; 2020, c. 16, ss. 192 to 195; 2019, c. 14, ss. 479 and 492; 2021, c. 14, ss. 208 and 209; 2021, c. 18, ss. 168 to 171.

ANNEXE F

(Repealed).

2012, c. 1, Schedule F; 2021, c. 18, s. 172.

SCHEDULE G

MINISTER OF TRANSPORT

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. The Minister of Transport administers the sectoral parameters of the deduction granted to seamen engaged in the international transportation of freight provided for in sections 737.27 to 737.28.1 of the Taxation Act (chapter I-3).

CHAPTER II

SECTORAL PARAMETERS OF DEDUCTION GRANTED TO SEAMEN ENGAGED IN INTERNATIONAL TRANSPORTATION OF FREIGHT

DIVISION I

INTERPRETATION AND GENERAL

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

“eligible shipowner” means a person or partnership who declares to the Minister that the person or partnership is an eligible shipowner within the meaning of section 737.27 of the Taxation Act;

“tax holiday for seamen engaged in the international transportation of freight” means the fiscal measure provided for in Title VII.6 of Book IV of Part I of the Taxation Act, under which an individual may deduct an amount in computing his or her taxable income for a taxation year.

2.2. In order for an individual who works for an eligible shipowner to benefit from the tax holiday for seamen engaged in the international transportation of freight for a taxation year, the eligible shipowner must obtain the following certificates from the Minister:

(1) a certificate in respect of the individual (in this chapter referred to as a “seaman certificate”); and

(2) a certificate in respect of the vessel on which the individual performed the duties relating to his or her work (in this chapter referred to as a “vessel certificate”).

The certificates referred to in the first paragraph must be obtained for each taxation year for which the individual may claim the tax holiday for seamen engaged in the international transportation of freight.

The application for the seaman certificate must be filed before 1 March of the calendar year that follows the individual’s taxation year concerned.

The application for the vessel certificate must be filed before 1 February of the calendar year that follows the individual’s taxation year to which the application for the seaman certificate relates. A detailed statement of the assignment of the vessel and a list of the individuals making up its crew for any period covered by the certificate must be filed with the application.

DIVISION II

SEAMAN CERTIFICATE

2.3. A seaman certificate issued to an eligible shipowner certifies that the individual referred to in the certificate is recognized as an eligible seaman in respect of that shipowner for the taxation year for which the application for the certificate was made. The certificate is deemed to specify the date of the beginning of that taxation year as the date of its coming into force.

The certificate states the name of the eligible shipowner and that of the vessel on which the individual performed his or her duties and for which a vessel certificate was issued to that shipowner.

The certificate also specifies any period described in paragraph 2 of section 2.4 for which the conditions of that section are met.

2.4. An individual may be recognized as an eligible seaman in respect of an eligible shipowner for a taxation year, if

(1) the individual worked for the shipowner during the year; and

(2) for a period of at least 10 consecutive days beginning or ending in the year, the individual performed all or substantially all of his or her duties on a vessel engaged in international freight transportation for which a vessel certificate was issued to the shipowner.

2.5. An eligible shipowner to which a seaman 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.

DIVISION III

VESSEL CERTIFICATE

2.6. The vessel certificate issued to an eligible shipowner certifies that the vessel referred to in the certificate is recognized as an eligible vessel for the individual’s taxation year to which the application for the seaman certificate relates. It is deemed to specify the date of the beginning of that taxation year as the date of its coming into force.

2.7. A vessel may be recognized as an eligible vessel for a taxation year if

(1) it is a Canadian-flagged vessel;

(2) its port of registry is located in Québec; and

(3) it is engaged in freight transportation outside Canadian waters for periods of at least 10 consecutive days beginning or ending in the year.

2012, c. 1, Schedule G.

SCHEDULE H

SOCIÉTÉ DE DÉVELOPPEMENT DES ENTREPRISES CULTURELLES

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. The Société de développement des entreprises culturelles administers the sectoral parameters of the following fiscal measures:

(1) the deduction in respect of a foreign worker holding a key position in a foreign production provided for in sections 737.22.0.9 to 737.22.0.11 of the Taxation Act (chapter I-3);

(2) the tax credit for Québec film productions provided for in sections 1029.8.34 to 1029.8.36 of the Taxation Act;

(3) the tax credit for film dubbing provided for in sections 1029.8.36.0.0.1 to 1029.8.36.0.0.3 of the Taxation Act;

(4) the film production services tax credit provided for in sections 1029.8.36.0.0.4 to 1029.8.36.0.0.6 of the Taxation Act;

(5) the tax credit for the production of sound recordings provided for in sections 1029.8.36.0.0.7 to 1029.8.36.0.0.9 of the Taxation Act;

(6) the tax credit for the production of performances provided for in sections 1029.8.36.0.0.10 to 1029.8.36.0.0.12 of the Taxation Act;

(7) the tax credit for book publishing provided for in sections 1029.8.36.0.0.13 to 1029.8.36.0.0.15 of the Taxation Act; and

(8) the tax credit for the production of multimedia events or environments presented outside Québec provided for in sections 1029.8.36.0.0.12.1 and 1029.8.36.0.0.12.2 of the Taxation Act.

CHAPTER II

SECTORAL PARAMETERS OF DEDUCTION IN RESPECT OF FOREIGN WORKER HOLDING KEY POSITION IN FOREIGN PRODUCTION

DIVISION I

INTERPRETATION AND GENERAL

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

“film production services tax credit” has the meaning assigned by the first paragraph of section 5.1;

“production” means a motion picture film, a video tape or a set of episodes or broadcasts that are part of a series;

“tax holiday for a foreign worker holding a key position in a foreign production” means the fiscal measure provided for in Title VII.3.3 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.

2.2. An individual must obtain a certificate from the Société de développement des entreprises culturelles in respect of each eligible production for which the individual intends to claim the tax holiday for a foreign worker holding a key position in a foreign production.

2.3. The Société de développement des entreprises culturelles must, in order to determine whether a production is considered as an eligible production, apply the same rules as those provided for in sections 5.6 to 5.8 to determine whether a production is recognized as an eligible production for the purposes of the film production services tax credit.

DIVISION II

CERTIFICATE

2.4. A certificate issued to an individual under this chapter certifies that the individual works as a producer, an executive producer, an associate producer, a director, an assistant director, an artistic director, a director of photography, a musical director, a chief film editor, a set decorator, a financial controller, an accountant, a bookkeeper or a visual effects producer, supervisor or coordinator, in the course of the eligible production referred to in the certificate.

2.5. An individual may be recognized as a producer in respect of an eligible production if the individual is the person responsible for decision-making in respect of the eligible production throughout the project development and production processes.

CHAPTER III

SECTORAL PARAMETERS OF TAX CREDIT FOR QUÉBEC FILM PRODUCTIONS

DIVISION I

INTERPRETATION AND GENERAL

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

“chroma key shooting” means any studio shooting in front of a plain coloured screen, generally blue or green, allowing, by means of electronic wizardry, the incorporation of objects, images or special effects in the final image;

“computer-aided special effects and animation” means special effects and animation sequences, as generally understood in the industry, created using digital technology, excluding effects that are strictly sound effects, subtitles and animation sequences essentially created by means of editing techniques;

“eligible online video service” means an online video service that carriesother pre-screened or pre-qualified content, is accessible in Québec, has Québecas part of its target audience and is considered to be an eligible online serviceby the Canadian Audio-Visual Certification Office;

“film” means a property that is a motion picture film, a video tape or a set of episodes or broadcasts that are part of a series;

“labour expenditure” of a corporation for a taxation year in respect of a film means an expenditure that would be the corporation’s labour expenditure for the year in respect of the film for the purposes of the tax credit for Québec film productions if no reference were made to subparagraph e of the second paragraph of section 1029.8.34 of the Taxation Act;

“producer” in respect of a film means the individual responsible for decision-making in respect of the film throughout the project development and production processes;

“production costs” of a corporation in respect of a film means costs incurred by the corporation in respect of the film that are production costs referred to in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.34 of the Taxation Act before subparagraph 1;

“tax credit for Québec film productions” means the fiscal measure provided for in Division II.6 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;

“television broadcaster” means the holder of a broadcasting licence issued by the Canadian Radio-television and Telecommunications Commission.

Any reference made, in a provision of this chapter, to an amount incurred or paid, including a labour expenditure, costs, a remuneration, a talent fee or an advance, is to be replaced, if the provision applies in respect of a favourable advance ruling, by a reference to such an amount determined according to a budget.

In this chapter, a reference to a favourable advance ruling is a reference to the document certifying the favourable advance ruling given.

3.2. A corporation must obtain a favourable advance ruling or a qualification certificate from the Société de développement des entreprises culturelles in respect of each film for which it intends to claim the tax credit for Québec film productions.

In addition, a corporation must obtain one or more of the following certificates from the Société de développement des entreprises culturelles, as applicable:

(1) if the film is one for which the corporation intends to claim one or more of the following tax credit enhancements:

(a) the tax credit enhancement applicable to certain French-language productions, a certificate in respect of the film (in this chapter referred to as a “French-language production certificate”),

(b) the tax credit enhancement applicable to giant-screen films, a certificate in respect of the film (in this chapter referred to as a “giant-screen film certificate”), or

(c) the tax credit enhancement determined by reference to public financial assistance, a certificate in respect of the film (in this chapter referred to as a “certificate relating to the tax credit enhancement determined by reference to financial assistance”); and 

(2) if it intends to avail itself of subparagraph a.1 of the first paragraph of section 1029.8.35 of the Taxation Act, a certificate in respect of the corporation as a regional corporation (in this chapter referred to as a “regional corporation certificate”).

If, at any time in the taxation year for which the corporation intends to benefit from the tax credit for Québec film productions or in the 24 months that precede that year, the corporation is not dealing at arm’s length with a corporation that is a television broadcaster or an eligible online video service provider, it must also obtain a certificate (in this chapter referred to as a “non-arm’s length certificate with regard to a television broadcaster” or a “non-arm’s length certificate with regard to an eligible online video service provider”, as the case may be) from the Société de développement des entreprises culturelles.

The certificate referred to in subparagraph 2 of the second paragraph must be obtained for each taxation year for which the corporation intends to avail itself in respect of a film of subparagraph a.1 of the first paragraph of section 1029.8.35 of the Taxation Act. Similarly, the non-arm’s length certificate with regard to a television broadcaster or the non-arm’s length certificate with regard to an eligible online video service provider, as the case may be, must be obtained for each taxation year referred to in the third paragraph for which the corporation intends to claim the tax credit for Québec film productions.

DIVISION II

FAVOURABLE ADVANCE RULING AND QUALIFICATION CERTIFICATE

3.3. A qualification certificate must be obtained for a film whose first trial composite is completed. If applicable, the qualification certificate confirms the favourable advance ruling given in respect of the film.

An application by a corporation for the issue of a qualification certificate in respect of a film must be filed,

(1) if the film was given a favourable advance ruling, within 18 months after the end of the corporation’s taxation year that includes the recording date of its first trial composite of the film; and

(2) in any other case, within three years after the end of that taxation year.

The Société de développement des entreprises culturelles may issue a qualification certificate to a corporation in respect of a film only if, at the time of the application for the qualification certificate, at least 95% of the amount that is the total production costs incurred by the corporation in respect of the film has been paid.

The Société de développement des entreprises culturelles must revoke a favourable advance ruling given to a corporation in respect of a film if the corporation fails to file an application for a qualification certificate in respect of the film within the time limit specified in the second paragraph or if such an application is denied. The effective date of the revocation is the date of coming into force of the favourable advance ruling.

3.4. A favourable advance ruling or a qualification certificate given or issued to a corporation under this chapter certifies that the film referred to in it is recognized as a Québec film production. In addition, the favourable advance ruling or the qualification certificate specifies, if applicable, that the film is a film in a foreign format.

If the corporation holds a valid regional corporation certificate, the Société de développement des entreprises culturelles must make sure, in the case of a co-produced film, that the following conditions have been met:

(1) the corporation is making the film either with another corporation in respect of which it is established, to the satisfaction of the Société de développement des entreprises culturelles, that it is a qualified corporation for the purposes of the tax credit for Québec film productions, or under a government agreement to which the Gouvernement du Québec, the Government of Canada or any of their departments, agencies or bodies is a party;

(2) the corporation is actively involved in its development; and

(3) the corporation’s share of the labour expenditure and production costs in respect of the film is a reasonable reflection of the corporation’s share of copyrights and revenues in the film, as well as its share of artistic, technical and financial responsibility with regard to the co-production of the film.

For the purposes of subparagraph b.1 of the second paragraph of section 1029.8.34 of the Taxation Act, the favourable advance ruling or the qualification certificate specifies, in the case of a docuseries, the name of the person who plays the role of the main character in the film.

If the film is a co-production, the favourable advance ruling or the qualification certificate specifies the corporation’s share, expressed as a percentage, of the labour expenditure and production costs in respect of the film for each taxation year for which they were incurred.

For the purposes of this section,

“labour expenditure” in respect of a film for a taxation year means the amount that would be obtained if, for each of the items included in the corporation’s labour expenditure in respect of the film for the taxation year, the amounts that the corporation incurred were replaced by all the amounts incurred in respect of the film and all those amounts were added together;

“production costs” in respect of a film for a taxation year means the aggregate of the costs incurred in respect of the film before the end of the year that are production costs referred to in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.34 of the Taxation Act before subparagraph 1, or that would be such production costs had they been incurred by the corporation.

3.5. The Société de développement des entreprises culturelles attaches to the favourable advance ruling or the qualification certificate it gives or issues in respect of a film to a corporation referred to in subparagraph 2 of the second paragraph of section 3.2 a document specifying, by budgetary item, the amount that is the portion of the corporation’s labour expenditure in respect of the film, for any taxation year for which the favourable advance ruling or qualification certificate is given or issued, that relates to services rendered in Québec, outside the Montréal area, in relation to the film.

However, in the case of a co-produced film, the first paragraph applies only if the conditions of the second paragraph of section 3.4 are met.

In this section, the “Montréal area” means the portion of the territory of Québec located within 25 km, by the shortest passable road normally used, from any point of the circumference of a circle having a radius of 25 km the centre of which is the Papineau subway station.

3.6. The Société de développement des entreprises culturelles attaches to the favourable advance ruling or the qualification certificate it gives or issues in respect of a film for which a corporation intends to avail itself of subparagraph b of the first paragraph of section 1029.8.35 of the Taxation Act, a document specifying, by budgetary item, the amount that is the portion of the corporation’s labour expenditure in respect of the film, for any taxation year for which the favourable advance ruling or the qualification certificate is given or issued, that relates to eligible computer-aided special effects and animation activities, in relation to the film.

Activities that contribute directly to the creation of computer-aided special effects and animation and to chroma keying, such as motion capture, correction of animation curves, rendering, image retouching, graphics, filming, the use of computerized and automated animation benches, the use of computer-assisted automated cameras and chroma key shooting are considered to be eligible computer-aided special effects and animation activities.

3.7. A film other than an inter-provincial co-production may be recognized as a Québec film production if

(1) the film belongs to an eligible class of films;

(2) no part of the film belongs to a class of films described in section 3.9 or is a variety or magazine program other than those that are described in subparagraph 4 or 5 of the first paragraph of section 3.8; and

(3) the film meets the following requirements:

(a) the exploitation requirements of section 3.10,

(b) the production requirements of section 3.11,

(c) in the case of films with a running length of 75 minutes or longer, the creative personnel requirements of section 3.12, and

(d) the production costs requirements of section 3.13.

A film that is an inter-provincial co-production may be recognized as a Québec film production if

(1) the Québec part of the film belongs to an eligible class of films;

(2) the Québec part of the film meets

(a) the exploitation requirements of section 3.10, and

(b) the production requirements of section 3.11;

(3) at least 75% of the production costs incurred in respect of the Québec part of the film or, in the case of a serial film, in respect of the Québec part of all the episodes, other than the costs related to financing the film, is paid to individuals who were resident in Québec at the end of the calendar year (in this section referred to as the “particular year”) that precedes the year in which the application for a favourable advance ruling or a qualification certificate was filed in respect of the film, or to corporations or partnerships that had an establishment in Québec during the taxation year of the corporation in which the application was filed; and

(4) the corporation referred to in the first paragraph of section 3.2

(a) is co-producing the film with one or more co-producing corporations from one or more other provinces or territories of Canada,

(b) has a financial participation in the film equal to or greater than 20%,

(c) can show its effective independence with respect to the other corporations involved in the co-production of the film,

(d) has the necessary rights to import the film into Québec, in the same proportion as its financial participation in the film and its share of the rights to the receipts from the film, and

(e) has a creative and technical participation in the co-production of the film at least equal to its financial participation in the co-production of the film.

However, subparagraph 4 of the second paragraph does not apply to a film in respect of which the Société de développement des entreprises culturelles considers that work was sufficiently advanced on 13 March 2008.

In the case of a film made under a government co-production agreement entered into by another government in Canada or by any department or agency of such a government, the rules of subparagraphs 1 to 3 of the second paragraph also apply to the Canadian part of the film.

In addition, for the purpose of determining whether a film is an international co-production at a particular date, the policies and requirements of Telefilm Canada that apply on that date apply as if they were expressly specified in this division.

For the purposes of the second paragraph, “production costs” in respect of a film means the aggregate of the costs incurred in respect of the film by a corporation that are production costs referred to in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.34 of the Taxation Act before subparagraph 1, or that would be such production costs had they been incurred by the corporation referred to in the first paragraph of section 3.2.

3.8. Subject to section 3.9, the following are eligible classes of films:

(1) fiction films, including films consisting entirely of sketches taken in full from a script and designed and arranged especially for television or online broadcasting;

(2) documentaries comprising at least 30 minutes of programming or 20 minutes of audiovisual content or, in the case of a series, at least 30 minutes of programming or 20 minutes of audiovisual content per episode, and documentaries intended for minors, which may comprise less;

(3) audiovisual magazine and variety programs, including variety programs featuring educational games, quizzes and contests for minors and designed and arranged especially for television or online broadcasting;

(4) audiovisual variety programs, including games, quizzes and contests, that are designed and arranged especially for television or online broadcasting and meet any of the following requirements: 

(a) at least two thirds of their content consists of performances by performing artists, other than interviews, or of recordings of improvisation matches,

(b) they are talk show-type programs during which all or substantially all the subjects of discussion are artistic, literary, dramatic or musical events or works, or

(c) all or substantially all of their content consists of performances by performing artists, other than interviews, or of recordings of improvisation matches, and of discussions concerning artistic, literary, dramatic or musical events or works; and

(5) audiovisual magazine programs that are designed and arranged especially for television or online broadcasting and meet the following requirements:

(a) they consist of a series of at least seven episodes and are part of a program cycle,

(b) they are neither fiction, nor a reconstruction of actual events, nor reality television,

(c) each program comprises at least 30 minutes of programming or 20 minutes of audiovisual content, 

(d) each program covers a number of subjects, whether or not they belong to the same field of knowledge, and

(e) each program consists of independent segments of comparable length.

For the purposes of subparagraph b of subparagraph 5 of the first paragraph, a reality television production is an audiovisual production in which a situation is created and filmed to be edited into its final form. The situation features a place, a group of individuals and a theme.

3.9. The following are not eligible classes of films:

(1) films produced for industrial, commercial, institutional or business purposes;

(2) films produced for the purpose of teaching or learning a technique;

(3) films intended for an adult audience that contain explicit sex scenes;

(4) video clips;

(5) films featuring a sports event or a sports activity;

(6) news or public affairs programs, or news features;

(7) weather, road or stock market reports;

(8) gala, award or parade television programs that present a live or pre-recorded event, in real time, with or without modification during editing;

(9) games, quizzes and contests, in any form, except educational programs in the form of games, quizzes or contests intended for minors, and except the programs described in subparagraph 4 of the first paragraph of section 3.8;

(10) fundraising productions;

(11) reality television productions;

(12) “making of” productions; and

(13) films, other than documentaries, consisting exclusively or almost exclusively of stock footage.

For the purposes of subparagraph 11 of the first paragraph, a reality television production is an audiovisual production in which a situation is created and filmed to be edited into its final form. The situation features a place, a group of individuals and a theme.

3.10. The following exploitation requirements must be met by a film, as applicable:

(1) for a film whose primary market is the television market, there must be an undertaking from a television broadcaster to broadcast it in Québec;

(2) for a film whose primary market is the theatrical market,

(a) if the conditions under which a giant-screen film certificate may be obtained are met, there must be an undertaking that the film will be shown in Canada in a public performance venue, and

(b) in any other case, there must be an undertaking by the holder of a distribution licence that the film will be shown in Québec in a public performance venue primarily used for showing films of all classes;

(2.1) for a film whose primary market is the online broadcasting market,

(a) in the case of an eligible online video service by a provider that is a television broadcaster, there must be an undertaking by the broadcaster to make the film accessible in Québec through its eligible online video service, and

(b) in the case of an eligible online video service by another provider, there must be an undertaking by a holder of a general distributor’s licence to show the film in Québec and an undertaking by the provider to that holder to make the film accessible in Québec through the eligible online video service;

(3) if a film is not an original French-language film and the application for a favourable advance ruling or a qualification certificate is filed in its respect with an undertaking by a television broadcaster to broadcast it in French in Québec or by the holder of a distribution licence that the film will be shown in French in theatres in Québec, the French dubbing of the film must be done in Québec, subject to the third paragraph;

(4) if a film is produced by a corporation that does not deal at arm’s length with a corporation that is a television broadcaster or an eligible online video service provider, it must be initially broadcast by a television broadcaster or an eligible online video service provider with which it deals at arm’s length;

(5) if a film is intended to be broadcast in Québec, close-captioning for the hearing-impaired is mandatory, unless the producer shows that it is impossible to satisfy this condition for technical reasons; and

(6) the producer must give an undertaking to have a film closed-captioned for the hearing-impaired before exploiting it on the video market in Québec.

For the purposes of subparagraph b of subparagraph 2 of the first paragraph, “class” means a class specified in section 81 of the Cinema Act (chapter C-18.1).

The requirement of subparagraph 3 of the first paragraph does not apply if a film is an international co-production involving a country of the Francophonie and, under the official co-production agreement, the foreign co-producer is responsible for delivering an original French version.

The application for a favourable advance ruling in respect of a film must be filed with the undertakings referred to in subparagraph 1, subparagraph b of subparagraphs 2 and 2.1 and subparagraph 6 of the first paragraph. Depending on the undertaking involved, when applying for a qualification certificate, the corporation must file a document confirming the television broadcasting of the film in Québec, its distribution in theatres in Québec, its online broadcasting accessible in Québec or its dubbing.

The application for a qualification certificate in respect of a film must be filed with the undertakings referred to in subparagraph a of subparagraphs 2 and 2.1 of the first paragraph.

3.11. The following production requirements must be met by a film:

(1) the position of producer must be held by an individual who was resident in Québec at the end of the calendar year (in this section referred to as the “particular year”) that precedes the year in which an application for a favourable advance ruling or a qualification certificate is filed in respect of the film; and

(2) the corporation filing the application must control the production of the film.

If there is a succession of producers during the development of the project or the production of the film because, for instance, of a change in ownership of the film, the requirement of subparagraph 1 of the first paragraph is considered to be met only if all of the producers were resident in Québec at the end of the particular year.

3.12. The creative personnel requirements are met by a film if the film obtains, in respect of its creative personnel, according to the rules of the third paragraph,

(1) a minimum of six points out of ten, calculated by awarding the number of points specified in the second paragraph for a particular function of that personnel only if the individual who wholly performs the function was resident in Québec at the end of the calendar year (in this section referred to as the “particular year”) that precedes the calendar year in which an application for a favourable advance ruling or a qualification certificate was filed in respect of the production; or

(2) a minimum of seven points out of ten, calculated by adding

(a) the total of the numbers each of which is the number of points specified in the second paragraph for a particular function of that personnel that is wholly performed by an individual who was resident in Québec at the end of the particular year, and

(b) the lesser of two and the total of the numbers each of which is the number of points specified in the second paragraph for a particular function of that personnel that is wholly performed by an individual who, at the end of the particular year, was not resident in Québec but was a Canadian citizen within the meaning of the Citizenship Act (R.S.C. 1985, c. C-29) or a permanent resident within the meaning of the Immigration and Refugee Protection Act (S.C. 2001, c. 27).

For the purposes of the first paragraph, the following number of points may be allotted to a film in respect of an individual:

(1) for the director, two points;

(2) for the screenwriter, two points;

(3) for the first lead actor, one point;

(4) for the second lead actor, one point;

(5) for the production designer, one point;

(6) for the director of photography, one point;

(7) for the music composer, one point; and

(8) for the chief film editor, one point.

The rules to which the first paragraph refers are the following:

(1) if the position of screenwriter is filled by more than one individual, the two points allotted for that function may, despite subparagraph 1 of the first paragraph and subparagraph a of subparagraph 2 of that paragraph, be taken into consideration only if all the individuals were resident in Québec at the end of the particular year or if one of them is

(a) an individual who was resident in Québec at the end of the particular year,

(b) the author of the script, provided that it is an original work or a film adaptation of a copyrighted work,

(c) the screenwriter who determines the final version of the script, and

(d) the screenwriter who receives the highest fee;

(2) the identity of the first and second lead actors is determined not only on the basis of the remuneration paid, regardless of its form, but also on the basis of on-screen time;

(3) if there is no actor, the individual who performs the function of dancer, singer, variety artist, host, announcer, moderator or off-screen interviewer or voices the part of a character in an animated film, depending on the nature of the film, may be substituted;

(4) the individual who is the focus of a documentary film is not considered to be an actor;

(5) the point for the function of music composer is allotted only if the music created for the film is an original work;

(6) in the case of an animated film, the function of animation camera operator is substituted for that of director of photography and the function of design supervisor for that of production designer; and

(7) if there is no production designer, the art director may be substituted and in the absence of an art director, the head set designer may be substituted.

However, the creative personnel requirements are not met by a film if it does not obtain at least two of the points allotted for the functions of director and screenwriter and at least one of the points allotted for the functions of first and second lead actors.

A documentary that is unable to obtain the minimum number of points specified in the first paragraph because some functions listed in the second paragraph are not performed by anyone is deemed to have obtained the minimum number of points if all the individuals who perform such functions during the production were resident in Québec at the end of the particular year.

3.13. The following production cost requirements must be met by a film:

(1) in the case of a film with a running length of 75 minutes or longer,

(a) at least 75% of the amount that is the total post-production costs, including costs incurred for laboratory work, film cutting, sound editing and re-recording, and preparing and integrating film credits and music, is paid for services provided in Québec, and

(b) at least 75% of the amount that is the total production costs incurred by the corporation referred to in the first paragraph of section 3.2 in respect of the film, excluding the costs listed in subparagraph a, the remuneration of the producer and of the creative personnel listed in the second paragraph of section 3.12 and the costs related to financing the film, is paid to individuals who were resident in Québec at the end of the calendar year (in the second paragraph referred to as the “particular year”) that precedes the year in which the application for a favourable advance ruling or a qualification certificate was filed in respect of the film, or to corporations or partnerships that had an establishment in Québec during the taxation year of the corporation in which the application was filed; and

(2) in the case of a film with a running time of less than 75 minutes, at least 75% of the amount that is the total production costs incurred by the corporation referred to in the first paragraph of section 3.2 in respect of the film, other than the costs related to financing the film, is paid to individuals who were resident in Québec at the end of the calendar year (in the second paragraph referred to as the “particular year”) that precedes the year in which the application for a favourable advance ruling or a qualification certificate was filed in respect of the film, or to corporations or partnerships that had an establishment in Québec during the taxation year of the corporation in which the application was filed.

If the business of a corporation or partnership referred to in subparagraph b of subparagraph 1 of the first paragraph or in subparagraph 2 of the first paragraph consists essentially in offering the services of a shareholder, of a member of the partnership or of a person related to a shareholder of the corporation or to a member of the partnership, any amount paid to the corporation or partnership is considered to be an amount paid to a corporation or partnership that has an establishment in Québec only if the shareholder, the member or the related person who supplied the services in the course of the production of the film was resident in Québec at the end of the particular year.

If there is a succession of corporations during the development of the project or the production of the film because, for instance, of a change in ownership of the film, the requirements of the first paragraph are deemed to be met where it appears that they would be met if the total production costs incurred by each corporation were taken into consideration. However, each corporation must show, to the satisfaction of the Société de développement des entreprises culturelles, that it is a qualified corporation for the purposes of the tax credit for Québec film productions.

For the purpose of determining whether a film that meets the conditions for a giant-screen film certificate also meets the requirements of the first paragraph, costs related to production or post-production services not available in Québec are not to be taken into account.

3.14. Each episode of a serial film may be recognized as a Québec film production if the conditions of section 3.7 are met in its respect. In such a case, the Société de développement des entreprises culturelles specifies in the favourable advance ruling or the qualification certificate which episodes of the film are recognized.

3.14.1. For the purposes of the first paragraph of section 3.4, a film is a film in a foreign format if

(1) in the case of a film whose primary market is the television market or the online broadcasting market,

(a) a licence for adaptation in Québec was issued in respect of the film, which is derived from an audiovisual concept designed and arranged especially for television or online broadcasting, as the case may be, and is created outside Québec, and

(b) the licence specifies the format elements of the program or of the episodes that will form a series, such as the title, idea, structure and subjects, the description of the plot and of the characters, the target audience and the duration of each episode; or

(2) in the case of a film whose primary market is the theatrical market,

(a) the rights with respect to the film were granted for adaptation in Québec, and

(b) the film is a new version of a film previously brought to the screen that is not itself derived from a storyline adapted from another work, such as a literary or theatrical work, and the storyline of that new version reprises the plot and characters of the film previously brought to the screen.

DIVISION III

FRENCH-LANGUAGE PRODUCTION CERTIFICATE

3.15. A French-language production certificate issued to a corporation certifies that the film referred to in the certificate is eligible for the tax credit enhancement applicable to certain French-language productions.

3.16. A film is eligible for the tax credit enhancement applicable to certain French-language productions if

(1) it belongs to a class of eligible films; and

(2) the following requirements are met by the film:

(a) the screenwriting and exploitation requirements, and

(b) the creative personnel requirements.

3.17. The following are classes of eligible films:

(1) feature-length, medium-length and short fiction films, including co-produced feature-length films;

(2) one-off documentaries, including co-productions, intended mainly for exploitation in French-language markets; and

(3) productions intended for minors.

For the purposes of subparagraph 3 of the first paragraph, a production intended for minors means a French-language one-off or serial production intended for minors which

(1) is designed and produced according to their expectations rather than those of adults, features young protagonists and reflects reality from a young person’s point of view; and

(2) (subparagraph repealed);

(3) is not a family-oriented production.

3.18. The following screenwriting and exploitation requirements must be met by a film:

(1) in the case of a film intended for commercial theatrical exploitation, it is written and developed in French and its initial exploitation in Québec is in French; and

(2) in the case of a film intended for the television market or the online broadcasting market, it is written and developed in French, its financial structure includes 51% or more French-language television broadcasting or online broadcasting licences in dollar terms, and its initial broadcast in Québec is in French.

3.19. The following creative personnel requirements must be met by a film:

(1) it must obtain a minimum of five points out of seven in respect of its creative personnel, according to the allotment rules set out in the second paragraph and the following weighting:

(a) for the director, two points,

(b) for the screenwriter, two points,

(c) for the first lead actor, two points, and

(d) for the second lead actor, one point; and

(2) except for a co-production, at least 75% of the acting fees paid to individuals, other than individuals performing a function listed in subparagraph 1, are paid to individuals who were resident in Québec at the end of the calendar year (in this section referred to as the “particular year”) that precedes the calendar year in which an application for a favourable advance ruling or a qualification certificate is filed in respect of the film.

For the purposes of the first paragraph, the points are allotted in accordance with the following rules:

(1) the number of points specified in subparagraph 1 of the first paragraph for a particular function of the creative personnel is allotted only if the individual who wholly performs the function was resident in Québec at the end of the particular year; and

(2) the identity of the first and second lead actors is determined not only on the basis of remuneration, regardless of its form, but also on the basis of on-screen time.

However, a documentary that is unable to obtain the minimum number of points specified in subparagraph 1 of the first paragraph because some functions listed in that subparagraph are not performed by anyone is deemed to have obtained the minimum number of points if all the individuals who perform such functions during the production were resident in Québec at the end of the particular year.

In the case of a co-production, the requirements of this section, except the requirement of subparagraph 2 of the first paragraph, must be met in respect of the entire co-production and not only in respect of the Québec portion of the co-production.

DIVISION IV

GIANT-SCREEN FILM CERTIFICATE

3.20. A giant-screen film certificate issued to a corporation certifies that the film referred to in the certificate is eligible for the tax credit enhancement applicable to giant-screen films.

3.21. A giant-screen film as generally understood in the industry is considered to be a giant-screen film.

DIVISION V

CERTIFICATE RELATING TO THE TAX CREDIT ENHANCEMENT DETERMINED BY REFERENCE TO FINANCIAL ASSISTANCE 

3.22. A certificate relating to the tax credit enhancement determined by reference to financial assistance issued to a corporation certifies that the film referred to in the certificate belongs to an eligible class of films for the tax credit enhancement determined by reference to public financial assistance. 

3.23. The following are classes of films eligible for the tax credit enhancement determined by reference to public financial assistance:

(1) feature-length fiction films with a minimum running length of 75 minutes, other than those referred to in paragraph 2;

(2) series or miniseries, other than those referred to in paragraph 2.1, each episode of which is a fiction production with a minimum running length of 75 minutes;

(2.1) series or miniseries each episode of which is a fiction production that is an animation production where the minimum running length of the series or miniseries is 75 minutes; and

(3) one-off documentaries with a minimum running length of 30 minutes or with a minimum of 20 minutes of audiovisual content, and documentaries intended for minors, which may have a shorter running length.

DIVISION VI

REGIONAL CORPORATION CERTIFICATE

3.24. A regional corporation certificate issued to a corporation certifies that it is recognized as a regional corporation for the taxation year for which the application for the certificate was filed.

3.25. A corporation may be recognized as a regional corporation if

(1) it does not carry on its film or television production activities mainly within the Montréal area during the particular taxation year in which it files its application for a regional corporation certificate or during the 24-month period preceding that year;

(2) it deals at arm’s length with all corporations that carry on film or television production activities mainly within the Montréal area, at any time in the particular taxation year or the 24-month period preceding that year; and

(3) it is not directly or indirectly controlled in any manner whatever at any time in the particular taxation year or the 24-month period preceding that year, by one or more individuals domiciled in the Montréal area or by one or more corporations that carry on film or television production activities mainly within the Montréal area.

In this section, the “Montréal area” means the portion of the territory of Québec located within 25 km, by the shortest passable road normally used, from any point in a circle having a radius of 25 km the centre of which is the Papineau subway station.

DIVISION VII

NON-ARM’S LENGTH CERTIFICATE WITH REGARD TO A TELEVISION BROADCASTER OR AN ELIGIBLE ONLINE VIDEO SERVICE PROVIDER

3.26. An application for a non-arm’s length certificate with regard to a television broadcaster or a non-arm’s length certificate with regard to an eligible online video service provider for a particular taxation year must be filed by a corporation not later than six months after the end of its taxation year preceding the particular year. 

To that end, the corporation must, on request, provide the Société de développement des entreprises culturelles with any document or information the latter considers necessary to enable it to determine the volume of independent productions produced by the corporation during the three taxation years preceding the particular year.

3.27. A non-arm’s length certificate with regard to a television broadcaster or a non-arm’s length certificate with regard to an eligible online video service provider issued to a corporation certifies that over 50% of its production costs for the last three taxation years, preceding the particular taxation year referred to in section 3.26, during which a film was produced, were incurred in relation to films broadcast by a television broadcaster or an eligible online video service provider with which the corporation deals at arm’s length

3.28. The Société de développement des entreprises culturelles may refuse to issue to a corporation, or may revoke, a non-arm’s length certificate with regard to a television broadcaster or a non-arm’s length certificate with regard to an eligible online video service provider if it becomes aware of a significant change in the volume of films produced by the corporation that are broadcast by the television broadcaster or the eligible online video service provider with which the corporation does not deal at arm’s length.

CHAPTER IV

SECTORAL PARAMETERS OF TAX CREDIT FOR FILM DUBBING

DIVISION I

INTERPRETATION AND GENERAL

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

“film” means a property that is a motion picture film, a video tape or a set of episodes or broadcasts that are part of a series;

“tax credit for film dubbing” means the fiscal measure provided for in Division II.6.0.0.1 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.

4.2. A corporation must obtain a qualification certificate from the Société de développement des entreprises culturelles in respect of the dubbed version of each film for which it intends to claim the tax credit for film dubbing.

DIVISION II

QUALIFICATION CERTIFICATE

4.3. A qualification certificate issued to a corporation under this chapter certifies that the dubbed version of a film referred to in the qualification certificate is recognized as a qualified production of the corporation. It also specifies the date on which that version was completed.

An application for a qualification certificate in respect of the dubbed version of a film must be filed by a corporation with the Société de développement des entreprises culturelles within three years following the end of the corporation’s taxation year that includes the recording date of the dubbed master copy of the film.

4.4. A dubbed version of a film may be recognized as a qualified production of a corporation if

(1) the film belongs to an eligible class of films;

(2) no part of the film belongs to a class of films referred to in section 4.6 or is a variety or magazine program other than those described in subparagraph 4 or 5 of the first paragraph of section 4.5; and

(3) at least three quarters of the individuals who, for the purpose of producing the dubbed version, provided services relating to the actors’ performance and to stage management were resident in Québec at the end of the calendar year preceding the year in which the services were provided.

For the purposes of subparagraph 3 of the first paragraph, stage management means directing the actors during the recording of the dubbed version of the film.

If there is a succession of corporations during the dubbing of a film, the condition of subparagraph 3 of the first paragraph is deemed to be met provided it appears that the requirement would be met if all the individuals who provided services relating to the actors’ performance and to stage management to the corporations for the production of that dubbed version were taken into account. However, each of the corporations must show, to the satisfaction of the Société de développement des entreprises culturelles, that it is an eligible corporation for the purposes of the tax credit for film dubbing.

4.5. Subject to section 4.6, the following are eligible classes of films:

(1) fiction films, including films consisting entirely of sketches taken in full from a script and designed and arranged especially for television;

(2) documentaries comprising at least 30 minutes of programming or, in the case of a series, at least 30 minutes of programming per episode, and documentaries intended for minors, which may comprise less;

(3) television magazine and variety programs, including variety programs featuring educational games, quizzes and contests for minors;

(4) television variety programs, including games, quizzes and contests that meet any of the following requirements:

(a) at least two thirds of their content consists of performances by performing artists, other than interviews, or of recordings of improvisation matches,

(b) they are talk show-type programs during which all or substantially all the subjects of discussion are artistic, literary, dramatic or musical events or works, or

(c) all or substantially all of their content consists of performances by performing artists, other than interviews, or of recordings of improvisation matches, and of discussions concerning artistic, literary, dramatic or musical events or works; and

(5) television magazine programs that meet the following requirements:

(a) they consist of a series of at least seven episodes and are part of a program cycle,

(b) they are neither fiction, nor a reconstruction of actual events, nor reality television,

(c) each program comprises at least 30 minutes of programming,

(d) each program covers a number of subjects, whether or not they belong to the same field of knowledge, and

(e) each program consists of independent segments of comparable length.

For the purposes of subparagraph b of subparagraph 5 of the first paragraph, a reality television production is an audiovisual production in which a situation is created and filmed to be edited into its final form. The situation features a place, a group of individuals and a theme.

4.6. The following are not eligible classes of films:

(1) films produced for industrial, commercial, institutional or business purposes;

(2) films produced for the purpose of teaching or learning a technique;

(3) films intended for an adult audience that contain explicit sex scenes;

(4) video clips;

(5) films featuring a sports event or a sports activity;

(6) news or public affairs programs, or news features;

(7) weather, road or stock market reports;

(8) gala, award or parade television programs that present a live or pre-recorded event, in real time, with or without modification during editing;

(9) games, quizzes and contests, in any form, except educational programs in the form of games, quizzes or contests intended for minors, and except the programs described in subparagraph 4 of the first paragraph of section 4.5;

(10) fundraising productions;

(11) reality television productions;

(12) “making of” productions; and

(13) films, other than documentaries, consisting exclusively or almost exclusively of stock footage.

For the purposes of subparagraph 11 of the first paragraph, a reality television production is an audiovisual production in which a situation is created and filmed to be edited in its final form. The situation features a place, a group of individuals and a theme.

4.7. In the case of a dubbed serial film, the dubbed version of each episode is recognized as a qualified production if the conditions of section 4.4 are met in its respect. In such a case, the Société de développement des entreprises culturelles specifies in the qualification certificate which episodes of the film are recognized.

CHAPTER V

SECTORAL PARAMETERS OF FILM PRODUCTION SERVICES TAX CREDIT

DIVISION I

INTERPRETATION AND GENERAL

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

“chroma key shooting” means any studio shooting in front of a plain coloured screen, generally blue or green, allowing, by means of electronic wizardry, the incorporation of objects, images or special effects in the final image;

“computer-aided special effects and animation” means special effects and animation sequences, as generally understood in the industry, created using digital technology, excluding effects that are exclusively sound effects, subtitles and animation sequences essentially created by means of editing techniques;

“film” means a property that is a motion picture film, a video tape or a set of episodes or broadcasts that are part of a series;

“film production services tax credit” means the fiscal measure provided for in Division II.6.0.0.2 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;

“labour cost” of a corporation for a taxation year in respect of a film means the aggregate of all amounts each of which is an amount described in any of paragraphs a to c of the definition of “production costs” in the first paragraph of section 1029.8.36.0.0.4 of the Taxation Act that would be included in the corporation’s production costs for the year in respect of the film for the purposes of the film production services tax credit if no reference were made to subparagraph c of the third paragraph of that section;

“production costs” of a corporation in respect of a film means costs incurred by the corporation in respect of the film that are production costs referred to in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.34 of the Taxation Act before subparagraph 1;

“television broadcaster” means the holder of a broadcasting licence issued by the Canadian Radio-television and Telecommunications Commission.

Any reference made, in a provision of this chapter, to an amount incurred or paid, including costs, a remuneration, a talent fee or an advance, is to be replaced, when necessary, by a reference to such an amount determined according to a budget.

In this chapter, a reference to a favourable advance ruling is a reference to the document certifying the favourable advance ruling given.

5.2. An approval certificate and a favourable advance ruling must be obtained from the Société de développement des entreprises culturelles in respect of each film for which a corporation intends to claim the film production services tax credit.

Where the corporation owns the copyright in the film, it alone may file applications for those documents. Otherwise, the corporation files the application for a favourable advance ruling while the corporation that owns the copyright files the application for an approval certificate.

If, at any time in the taxation year for which the corporation intends to benefit from the film production services tax credit or in the 24 months that precede that year, the corporation does not deal at arm’s length with a corporation that is a television broadcaster, it must also obtain a certificate (in this chapter referred to as a “non-arm’s length certificate”) from the Société de développement des entreprises culturelles. The certificate must be obtained for each taxation year for which the corporation intends to claim the tax credit.

DIVISION II

APPROVAL CERTIFICATE

5.3. An approval certificate issued to a corporation under this chapter certifies that the film referred to in the certificate is recognized as a qualified production. It also specifies the filing date of the application for its issue.

The Société de développement des entreprises culturelles issues an approval certificate to a corporation only if the corporation owns the copyright in the film.

Unless it is a qualified corporation for the purposes of the film production services tax credit, the corporation must send a copy of the approval certificate it was issued in respect of the film to each of the corporations that has entered into a service contract with it for the production of the film and intends to claim the tax credit in respect of the film.

5.4. A film may be recognized as a qualified production if

(1) the film belongs to an eligible class of films described in section 5.5;

(2) no part of the film belongs to a class of films referred to in section 5.6; and

(3) the following production costs are $250,000 or more:

(a) where a film is part of a series or miniseries, the production costs of the series or miniseries, or

(b) in any other case, the production costs of the film.

5.5. Subject to section 5.6, the following are eligible classes of films:

(1) fiction films, including films consisting entirely of sketches taken in full from a script and designed and arranged especially for television;

(2) documentaries comprising at least 30 minutes of programming or, in the case of a series, at least 30 minutes of programming per episode, and documentaries intended for minors or virtual reality documentaries, which may comprise less;

(3) (paragraph repealed);

(4) (paragraph repealed);

(5) (paragraph repealed).

For the purposes of subparagraph 2 of the first paragraph, virtual reality means the technology that enables real-time interactive simulations through computer-generated images and a virtual environment which a person can explore and whose purpose is to replace the real world with a virtual world and virtual objects. Virtual reality may apply to all sensory pathways.

5.6. The following are not eligible classes of films:

(1) films produced for industrial, commercial, institutional or business purposes;

(2) films produced for the purpose of teaching or learning a technique;

(3) films intended for an adult audience that contain explicit sex scenes;

(4) video clips;

(5) films featuring a sports event or a sports activity;

(6) news or public affairs programs, or news features;

(7) weather, road or stock market reports;

(8) gala, award or parade television programs that present a live or pre-recorded event, in real time, with or without modification during editing;

(9) games, quizzes and contests, in any form, except educational programs in the form of games, quizzes or contests intended for minors;

(10) fundraising productions;

(11) reality television productions;

(12) “making of” productions; and

(13) films, other than documentaries, consisting exclusively or almost exclusively of stock footage.

For the purposes of subparagraph 11 of the first paragraph, a reality television production is an audiovisual production in which a situation is created and filmed to be edited into its final form. The situation features a place, a group of individuals and a theme.

5.7. In the case of a serial film, each episode may be recognized as a qualified production if the conditions of section 5.4 are met in its respect. In such a case, the Société de développement des entreprises culturelles specifies in the approval certificate which episodes of the film are recognized.

DIVISION III

FAVOURABLE ADVANCE RULING

5.8. A favourable advance ruling given to a corporation under this chapter certifies that the corporation is recognized, in respect of the film referred to in the ruling, for the purposes of the definition of “qualified corporation” in the first paragraph of section 1029.8.36.0.0.4 of the Taxation Act. It also specifies whether the main filming or taping in Québec in respect of the film is carried out after 12 June 2009.

To be valid, an application for a favourable advance ruling filed in respect of a film must be accompanied by a copy of the approval certificate issued in relation to the film.

A corporation may be recognized in respect of a film if

(1) the corporation owns the copyright in the film throughout the period in which production of the film is carried out in Québec; or

(2) the corporation has entered into a service contract for the production of the film with the corporation that owns the copyright in the film.

However, the condition of subparagraph 2 of the third paragraph applies only if it is established, to the satisfaction of the Société de développement des entreprises culturelles, that the corporation that owns the copyright in the film does not meet the conditions, other than the condition related to obtaining a favourable advance ruling in respect of the film, to be a qualified corporation for the purposes of the film production services tax credit.

5.9. The Société de développement des entreprises culturelles attaches to the favourable advance ruling it gives to a corporation in respect of a film a document specifying, by budgetary item, the amount that is the portion of the corporation’s labour cost in respect of the film, for any taxation year for which the favourable advance ruling is given, that relates to eligible activities connected with the production of computer-aided special effects and animation, in relation to the film.

(1) if the film is recognized as a qualified production for which the corporation intends to avail itself of subparagraph a.1 of the first paragraph of section 1029.8.36.0.0.5 of the Taxation Act, the portion of the corporation’s labour cost in respect of the film, for any taxation year for which the favourable advance ruling is given, that relates to eligible activities connected with the production of computer-aided special effects and animation, in relation to the film; or

(2) if the film is recognized as a qualified low-budget production for which the corporation intends to avail itself of subparagraph b of the first paragraph of section 1029.8.36.0.0.5 of that Act, the portion of the corporation’s labour expenditure in respect of the film, for any taxation year for which the favourable advance ruling is given, that relates to eligible activities connected with the production of computer-aided special effects and animation, in relation to the film.

Activities that contribute directly to the creation of computer-aided special effects and animation and to chroma keying, such as motion capture, correction of animation curves, rendering, image retouching, graphics, filming, the use of computerized and automated animation benches, the use of computer-assisted automated cameras and chroma key shooting are considered to be eligible computer-aided special effects and animation activities.

DIVISION IV

NON-ARM’S LENGTH CERTIFICATE

5.10. An application for a non-arm’s length certificate, for a particular taxation year, must be filed by a corporation not later than six months after the end of its taxation year preceding the particular year.

For that purpose, the corporation must, on request, provide the Société de développement des entreprises culturelles with any document or information the Société considers necessary to enable it to determine the volume of the independent productions produced by the corporation during the three taxation years preceding the particular year.

5.11. A non-arm’s length certificate issued to a corporation certifies that over 50% of its production costs for the last three taxation years preceding the particular taxation year referred to in section 5.10, during which a film was produced, were incurred in relation to films broadcast by a television broadcaster with which the corporation deals at arm’s length.

5.12. The Société de développement des entreprises culturelles may refuse to issue to a corporation, or may revoke, a non-arm’s length certificate if it becomes aware of a significant change in the volume of films produced by the corporation that are broadcast by the television broadcaster with which the corporation does not deal at arm’s length.

CHAPTER VI

SECTORAL PARAMETERS OF TAX CREDIT FOR PRODUCTION OF SOUND RECORDINGS

DIVISION I

INTERPRETATION AND GENERAL

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

“film” means a property that is a motion picture film, a video tape or a set of episodes or broadcasts that are part of a series;

“labour expenditure” of a corporation for a taxation year in respect of a recording means an expenditure that would be the corporation’s labour expenditure for the year in respect of the recording for the purposes of the tax credit for the production of sound recordings if no reference were made to subparagraph c of the second paragraph of section 1029.8.36.0.0.7 of the Taxation Act;

“production costs” of a corporation at a particular time in respect of a recording means the aggregate of the costs incurred by the corporation in respect of the recording at or before that time that are production costs described in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.36.0.0.7 of the Taxation Act that precedes subparagraph 1;

“recording” means a sound recording, a digital audiovisual recording or a clip;

“tax credit for the production of sound recordings” means the fiscal measure provided for in Division II.6.0.0.3 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;

“television broadcaster” means the holder of a broadcasting licence issued by the Canadian Radio-television and Telecommunications Commission;

“title” means an organized set of information.

A reference, in a provision of this chapter, to an amount incurred or paid, including a labour expenditure, costs, a remuneration, a talent fee or an advance, is to be replaced, if the provision applies in respect of a favourable advance ruling, by a reference to such an amount determined according to a budget.

In this chapter, a reference to a favourable advance ruling is a reference to the document certifying the favourable advance ruling given.

6.2. A corporation must obtain a favourable advance ruling or a qualification certificate from the Société de développement des entreprises culturelles in respect of each recording for which it intends to claim the tax credit for the production of sound recordings.

Despite any other provision of this chapter, a favourable advance ruling or a qualification certificate is given or issued to a corporation, in respect of a particular recording, only if

(1) the corporation is a record company recognized by the Société de développement des entreprises culturelles; or

(2) the corporation has entered into an agreement, with a view to exploiting the particular recording, with another corporation that is a record company recognized by the Société de développement des entreprises culturelles.

DIVISION II

FAVOURABLE ADVANCE RULING AND QUALIFICATION CERTIFICATE

6.3. A qualification certificate must be obtained for a recording whose master is completed. If applicable, the qualification certificate confirms the favourable advance ruling given in respect of the recording.

An application by a corporation for the issue of a qualification certificate in respect of a recording must be filed,

(1) if the recording was given a favourable advance ruling, within 18 months after the end of the corporation’s taxation year that includes the completion date of the master of the recording; and

(2) in any other case, within three years after the end of that taxation year.

The Société de développement des entreprises culturelles must revoke a favourable advance ruling given to a corporation in respect of a recording if the corporation fails to file an application for a qualification certificate in respect of the recording within the time limit specified in the second paragraph or if such an application is denied. The effective date of the revocation is the date of coming into force of the favourable advance ruling.

6.4. A favourable advance ruling or a qualification certificate given or issued to a corporation under this chapter certifies that the recording referred to in it is recognized as a qualified sound recording, a qualified digital audiovisual recording or a qualified clip of the corporation. The favourable advance ruling or qualification certificate also states that the corporation is a record company recognized by the Société de développement des entreprises culturelles or a corporation that has entered into an agreement with such a corporation with a view to exploiting the recording.

Furthermore, the favourable advance ruling or qualification certificate specifies the filing date of the application for its issue. In the event that the filing date precedes 1 September 2014 but follows 4 June 2014, the Société de développement des entreprises culturelles specifies in the favourable advance ruling or qualification certificate whether or not the work in respect of the recording was sufficiently advanced on that latter date.

If the recording is a co-production, the favourable advance ruling or the qualification certificate specifies the corporation’s share, expressed as a percentage, of the labour expenditure and production costs in respect of the recording for each taxation year for which they were incurred. The corporation’s share must reflect, in respect of the recording, the corporation’s production costs at the end of the year and the corporation’s labour expenditure for the year and take into account the scope of the responsibilities assumed by the corporation in the co-production.

For the purposes of this section,

“labour expenditure” in respect of a recording for a taxation year means the amount that would be obtained if, for each of the items included in the corporation’s labour expenditure in respect of the recording for the taxation year, the amounts that the corporation incurred were replaced by all the amounts incurred in respect of the recording and all those amounts were added together;

“production costs” in respect of a recording for a taxation year means the aggregate of the costs incurred in respect of the recording before the end of the year that are production costs described in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.36.0.0.7 of the Taxation Act that precedes subparagraph 1, or that would be such production costs had they been incurred by the corporation.

6.5. In order for a sound recording to be recognized as a qualified sound recording of a corporation,

(1) unless it is a recording of a comedy show, at least 60% of the sound recording, determined with reference to its length in minutes, must consist in musical content;

(2) the sound recording must obtain, in respect of its creative personnel, a minimum of five points out of nine, calculated by awarding the number of points specified in the second paragraph for a particular function of that personnel only if the individual who wholly performs the function was resident in Québec at the end of the calendar year (in this section referred to as the “particular year”) that precedes the calendar year in which the recording work began or, if the function performed by the individual is that of lyricist, scriptwriter or composer, was resident in Québec for a continuous period of at least five years prior to the beginning of the work;

(3) at least 75% of the amount that is the corporation’s production costs in respect of the sound recording, other than the remuneration paid to an individual who performs a function referred to in any of subparagraphs 1 to 8 of the second paragraph, must have been paid to individuals who were resident in Québec at the end of the particular year or to corporations that had an establishment in Québec in that year;

(4) the sound recording must be produced by the corporation to be released in the retail market for commercial exploitation purposes; and

(5) the sound recording must not have been produced for the purpose of teaching or learning a technique or to further the specific objectives of a business or a corporation, other than the one set out in subparagraph 4, and is not an audiobook, a sound effects database or a component of a game.

For the purposes of the first paragraph, the following number of points may be allotted to a recording in respect of an individual:

(1) for the lyricist or the scriptwriter,

(a) two points in the case of a recording of a comedy show, or

(b) one point in any other case;

(2) for the composer,

(a) two points in the case of an instrumental recording, or

(b) one point in any other case;

(3) for the artistic director, one point;

(4) for the musical director, one point;

(5) for the director, one point;

(6) for the music arranger, one point;

(7) for the sound engineer, one point; and

(8) for the featured artist, two points.

For the purposes of this section,

(1) where a function referred to in any of subparagraphs 1 to 7 of the second paragraph is performed by two or more individuals, the number of points awarded for that function must be taken into account, despite subparagraph 2 of the first paragraph, if the requirement of that subparagraph 2 would be met in respect of at least half of the individuals were it read without reference to “wholly” ; and

(2) whether an individual is the featured artist is determined on the basis of the individual’s remuneration, the individual’s designation as the featured artist in promotional materials and the length of the individual’s performance.

For the purposes of subparagraph 4 of the first paragraph, a sound recording is considered to be released in the retail market if it is offered on the Internet for downloading.

If there is a succession of particular corporations during the production of a sound recording, the condition of subparagraph 3 of the first paragraph is deemed to be met provided it appears that the requirements would be met if all the individuals and corporations that provided services to the particular corporations in respect of the production of the sound recording were taken into account. However, each particular corporation must show to the satisfaction of the Société de développement des entreprises culturelles that it is a qualified corporation for the purposes of the tax credit for the production of sound recordings.

6.6. In order for a digital audiovisual recording to be recognized as a qualified digital audiovisual recording of a corporation,

(1) the digital audiovisual recording must run at least

(a) 20 minutes, if it is intended for children under 13 years of age, or

(b) 30 minutes, in any other case;

(2) the main feature of the digital audiovisual recording must consist exclusively or almost exclusively of numbers by an artist that are taken from the artist’s performances, from never previously released productions or from clips;

(3) the digital audiovisual recording must obtain, in respect of its creative personnel, a minimum of five points out of nine, calculated by awarding the number of points specified in the second paragraph for a particular function of that personnel only if the individual who wholly performs the function was resident in Québec at the end of the calendar year (in this section referred to as the “particular year”) that precedes the calendar year in which the recording work began or, if the function performed by the individual is that of lyricist, scriptwriter or composer, was resident in Québec for a continuous period of at least five years prior to the beginning of the work;

(4) at least 75% of the amount that is the corporation’s production costs in respect of the digital audiovisual recording, other than the remuneration paid to an individual who performs a function referred to in any of subparagraphs 1 to 8 of the second paragraph, must have been paid to individuals who were resident in Québec at the end of the particular year or to corporations that had an establishment in Québec in that year;

(5) the digital audiovisual recording must be produced by the corporation to be released in the retail market for commercial exploitation purposes; and

(6) the digital audiovisual recording must not be described in section 6.7.

For the purposes of the first paragraph, the following number of points may be allotted to a digital audiovisual recording in respect of an individual:

(1) for the lyricist or the scriptwriter,

(a) two points in the case of a recording of a comedy show, or

(b) one point in any other case;

(2) for the composer,

(a) two points in the case of an instrumental recording, or

(b) one point in any other case;

(3) for the artistic director, one point;

(4) for the musical director, one point;

(5) for the director, one point;

(6) for the music arranger, one point;

(7) for the sound engineer, one point; and

(8) for the featured artist, two points.

For the purposes of this section,

(1) in determining whether a main feature consists exclusively or almost exclusively of numbers by an artist that are taken from the artist’s performances, from never previously released productions or from clips, the artist’s participation as an actor, host or guest artist must not be taken into account;

(2) where a function referred to in any of subparagraphs 1 to 7 of the second paragraph is performed by two or more individuals, the number of points awarded for that function must be taken into account, despite subparagraph 3 of the first paragraph, if the requirement of that subparagraph 3 would be met in respect of at least half of the individuals were it read without reference to “wholly” ; and

(3) no points may be taken into account for the function of lyricist or scriptwriter in the case of an instrumental recording; and

(4) whether an individual is the featured artist is determined on the basis of the individual’s remuneration, the individual’s designation as the featured artist in promotional materials and the length of the individual’s performance.

If there is a succession of particular corporations during the production of a digital audiovisual recording, the condition of subparagraph 4 of the first paragraph is deemed to be met provided it appears that the requirement would be met if all the individuals and corporations that provided services to the particular corporations in respect of the production of the digital audiovisual recording were taken into account. However, each particular corporation must show to the satisfaction of the Société de développement des entreprises culturelles that it is a qualified corporation for the purposes of the tax credit for the production of sound recordings.

6.7. A digital audiovisual recording to which subparagraph 6 of the first paragraph of section 6.6 refers is such a recording of a particular corporation that

(1) is a title that has allowed any corporation to benefit from the tax credit for multimedia titles within the meaning of section 5.1 of Schedule A or from the tax credit for corporations specialized in the production of multimedia titles within the meaning of section 6.1 of that schedule;

(2) consists mainly in a film or a part of a film that has allowed a corporation referred to in the second paragraph to benefit from the tax credit for Québec film productions within the meaning of the first paragraph of section 3.1 or from the film production services tax credit within the meaning of the first paragraph of section 5.1;

(3) is produced for the purpose of teaching or learning a technique or to further the specific objectives of a business or a corporation, other than the one set out in subparagraph 5 of the first paragraph of section 6.6;

(4) is an audiobook, a sound effects database or a component of a game;

(5) consists wholly or partly in explicit sex scenes; or

(6) is likely to incite hatred toward an identifiable group.

A corporation to which subparagraph 2 of the first paragraph refers is any of

(1) the particular corporation;

(2) a corporation that is associated with the particular corporation at the time that the particular corporation files with the Société de développement des entreprises culturelles, in respect of the digital audiovisual recording, an application for a favourable advance ruling or, if such an application is not filed, an application for a qualification certificate; and

(3) a corporation that would have been associated with the particular corporation at the time referred to in subparagraph 2 if the corporation had not been dissolved and the persons or partnerships that directly or indirectly controlled the corporation, in any manner whatever, immediately before its dissolution, had still controlled it at that time.

For the purposes of this section, paragraph 5 of section 5 of this Act and the relevant provisions of the Taxation Act are to be read as if “in a taxation year” wherever it appears was replaced by “at any time”, with the necessary modifications.

6.8. In order for a clip to be recognized as a qualified clip of a corporation,

(1) the clip must have been produced to complement a recording that is recognized as a qualified sound recording or a qualified digital audiovisual recording, within 24 months after the recording date of the master of the recording or within 24 months after the recording date of the master of the first clip produced to complement the recording;

(2) the clip must have been produced by the corporation to promote the recording referred to in subparagraph 1;

(3) the clip must have been produced by the corporation for commercialization or for broadcasting by a television broadcaster or by the holder of a distribution licence under which the clip will be exploited in Québec in a public performance venue;

(4) at least 75% of the amount that is the corporation’s production costs in respect of the clip, other than the remuneration paid to the director, must have been paid to individuals who were resident in Québec at the end of the calendar year (in this section referred to as the “particular year”) that precedes the calendar year in which the recording work began or to corporations that had an establishment in Québec in the particular year;

(5) the director of the clip must have been resident in Québec at the end of the particular year; and

(6) the clip must not be a component of a game, must not contain explicit sex scenes and must not be likely to incite hatred toward an identifiable group.

For the purposes of subparagraph 3 of the first paragraph, a clip is considered to be commercialized if it is offered on the Internet for downloading.

If there is a succession of particular corporations during the production of a clip, the condition of subparagraph 4 of the first paragraph is deemed to be met provided it appears that the requirement would be met if all the individuals and corporations that provided services to the particular corporations in respect of the production of the clip were taken into account. However, each particular corporation must show to the satisfaction of the Société de développement des entreprises culturelles that it is a qualified corporation for the purposes of the tax credit for the production of sound recordings.

DIVISION III

RECOGNITION OF A RECORD COMPANY

6.9. A corporation may be recognized by the Société de développement des entreprises culturelles as a record company in respect of a recording if

(1) it has distributed in the retail market, at any time in the taxation year in which production of the recording began (in this section referred to as the “particular year”) or in the 365-day period preceding the beginning of that year, at least five sound recordings or digital audiovisual recordings on any of its labels;

(2) it has released, in the period including the particular year and the 730 days preceding the beginning of that year, at least three new sound recordings or digital audiovisual recordings on any of its labels; and

(3) it has entered, with one or more distributors, into a distribution agreement that is in force, for all its labels, throughout the particular year.

CHAPTER VII

SECTORAL PARAMETERS OF TAX CREDIT FOR PRODUCTION OF PERFORMANCES

DIVISION I

INTERPRETATION AND GENERAL

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

“labour expenditure” of a corporation for a taxation year in respect of a performance means an expenditure that would be the corporation’s labour expenditure for the year in respect of the performance for the purposes of the tax credit for the production of performances if no reference were made to subparagraph d of the second paragraph of section 1029.8.36.0.0.10 of the Taxation Act;

“production costs” of a corporation at a particular time in respect of a performance means the aggregate of the costs incurred by the corporation in respect of the performance at or before that time that are production costs described in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.36.0.0.10 of the Taxation Act that precedes subparagraph 1;

“tax credit for the production of performances” means the fiscal measure provided for in Division II.6.0.0.4 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.

A reference made, in a provision of this chapter, to an amount incurred or paid, including a labour expenditure, costs, a remuneration, a talent fee or an advance, is to be replaced, if the provision applies in respect of a favourable advance ruling, by a reference to such an amount determined according to a budget.

In this chapter, a reference to a favourable advance ruling is a reference to the document certifying the favourable advance ruling given.

7.2. A corporation must obtain a favourable advance ruling or a qualification certificate from the Société de développement des entreprises culturelles in respect of each performance for which it intends to claim the tax credit for the production of performances. The favourable advance ruling or qualification certificate is valid only for

(1) the period from the preproduction stage to the end of the first year following the first showing before an audience;

(2) the period covering the second year following the first showing before an audience; or

(3) the period covering the third year following the first showing before an audience.

DIVISION II

FAVOURABLE ADVANCE RULING AND QUALIFICATION CERTIFICATE

7.3. A qualification certificate must be obtained for a performance for each of the periods specified in section 7.2. If applicable, the qualification certificate confirms the favourable advance ruling given in respect of the performance for that period.

An application by a corporation for the issue of a qualification certificate in respect of a performance for a period referred to in section 7.2 must be filed,

(1) if the performance has been given a favourable advance ruling for that period, within 18 months after the end of the corporation’s taxation year that includes the last day of the period; and

(2) in any other case, within three years after the end of that taxation year.

The Société de développement des entreprises culturelles must revoke a favourable advance ruling given to a corporation in respect of a performance if the corporation fails to file an application for a qualification certificate in respect of the performance within the time specified in the second paragraph or if such an application is denied. The effective date of the revocation is the date of coming into force of the favourable advance ruling.

7.4. A favourable advance ruling or a qualification certificate given or issued to a corporation under this chapter certifies that the performance referred to in it is recognized as a qualified performance of the corporation for the period referred to in section 7.2 that is specified in the ruling or qualification certificate. If the performance is an aquatic show, a circus show or an ice show any of the periods referred to in section 7.2 of which began before 14 March 2008 and had not ended on 13 March 2008, it may also be so recognized for a period referred to in section 7.2, even if the conditions of section 7.6 are met in its respect only from any day included in that period, unless that rule has already been applied to such an earlier period. In such a case, the date from which all those conditions are met in respect of the performance must be specified in the favourable advance ruling or the qualification certificate.

Furthermore, the favourable advance ruling or qualification certificate specifies, in the case where it is given or issued for the period described in paragraph 1 of section 7.2, the filing date of the application for its issue or, in any other case, the filing date of the application for the issue of the favourable advance ruling or qualification certificate given or issued for the period described in that paragraph 1. In the event that the filing date precedes 1 September 2014 but follows 4 June 2014, the Société de développement des entreprises culturelles specifies in the favourable advance ruling or qualification certificate whether or not the work in respect of the performance was sufficiently advanced on that latter date.

If applicable, the favourable advance ruling or the qualification certificate also specifies that the performance is

(1) a musical comedy in respect of which any of the periods referred to in section 7.2 had not ended on 20 March 2012; or

(2) a comedy show for which the application for an advance ruling or, in the absence of such an application, an application for a qualification certificate for the period referred to in paragraph 1 of section 7.2 is filed with the Société de développement des entreprises culturelles after 30 June 2015 or, in the event that the Société considers that the work on the show was not sufficiently advanced on 26 March 2015, after that date.

If the performance is a co-production, the favourable advance ruling or qualification certificate specifies the corporation’s share, expressed as a percentage, of the labour expenditure and production costs in respect of the performance for each taxation year for which they were incurred. The corporation’s share must reflect, in respect of the performance, the corporation’s production costs at the end of the year and the corporation’s labour expenditure for the year, and take into account the scope of the responsibilities assumed by the corporation in the co-production.

For the purposes of this section,

“labour expenditure” in respect of a performance for a taxation year means the amount that would be obtained if, for each of the items included in the corporation’s labour expenditure in respect of the performance for the taxation year, the amounts that the corporation has incurred were replaced by all the amounts incurred in respect of the performance and all those amounts were added together; and

“production costs” in respect of a performance for a taxation year means the aggregate of the costs incurred in respect of the performance before the end of the year that are production costs described in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.36.0.0.10 of the Taxation Act that precedes subparagraph 1, or that would be such production costs had they been incurred by the corporation.

7.5. A favourable advance ruling or a qualification certificate may not be given or issued in respect of a performance for a period specified in paragraph 2 or 3 of section 7.2 if the requirements of section 7.6 have not been met in respect of the performance for the period referred to in paragraph 1 of section 7.2.

However, the first paragraph does not apply in respect of a performance that is an aquatic show, a circus show or an ice show in respect of which any of the periods referred to in section 7.2 began before 14 March 2008 and had not ended on 13 March 2008.

7.6. In order for a given performance to be recognized as a qualified performance of a corporation,

(1) it must be a music, live theatre, aquatic, comedy, mime, magic, circus or ice show;

(2) it must be produced by the corporation and the corporation must give at least five public showings of one or more performances each of which is

(a) a performance in respect of which the requirements of subparagraphs 1 and 4 to 6 are met, and

(b) a performance that the corporation produced or co-produced in the taxation year during which it began producing the given performance or in the 365 days that preceded the beginning of that year;

(3) its production and its exploitation must be under the control of the corporation, which must demonstrate, to the satisfaction of the Société de développement des entreprises culturelles, that it is a qualified corporation for the purposes of the tax credit for the production of performances;

(4) it must obtain, in respect of its creative personnel, a minimum of five points out of nine, calculated by awarding the number of points specified in the second paragraph for a particular function of that personnel only if the individual who wholly performs the function

(a) was resident in Québec at the end of the calendar year that precedes the calendar year in which the period specified in section 7.2 for which the application for a favourable advance ruling or a qualification certificate was filed in respect of the performance began, if the function performed by the individual is that of music arranger, artistic director, lighting designer, sound designer, musical director or featured artist, or

(b) was resident in Québec at the end of the calendar year that precedes the calendar year in which the performance production work began or, if the function performed by the individual is that of lyricist, scriptwriter or composer, was resident in Québec for a continuous period of at least five years prior to the beginning of the work;

(5) at least 75% of the amount that is the corporation’s production costs in respect of the performance, other than the remuneration paid to an individual who performs a function referred to in any of subparagraphs 1 to 8 of the second paragraph, must have been paid to individuals who were resident in Québec at the end of the particular calendar year that precedes the year in which the performance production work began or to corporations that had an establishment in Québec in that particular calendar year; and

(6) the performance must not be a show given at a private event, a benefit or a gala, a component of a game or part of an entertainment or catering service.

For the purposes of the first paragraph, the following number of points may be allotted to a performance in respect of an individual:

(1) for the lyricist or the scriptwriter,

(a) two points in the case of a comedy or live theatre show, or

(b) one point in any other case;

(2) for the composer,

(a) two points in the case of an instrumental recording, or

(b) one point in any other case;

(3) for the artistic director, one point;

(4) for the musical director, one point;

(5) for the lighting designer, one point;

(6) for the sound designer, one point;

(7) for the music arranger, one point; and

(8) for the featured artist, two points.

For the purposes of this section,

(1) where a function referred to in any of subparagraphs 1 to 7 of the second paragraph is performed by two or more individuals, the number of points awarded for that function must be taken into account, despite subparagraph 4 of the first paragraph, if the requirement of that subparagraph 4 would be met in respect of at least half of the individuals were the portion of that subparagraph before subparagraph a read without reference to “wholly” ;

(2) no points may be taken into account for the function of lyricist or scriptwriter in the case of an instrumental performance; and

(3) which individual is the featured artist is determined on the basis of the individual’s remuneration, the individual’s designation as the featured artist in promotional materials and the length of the individual’s performance.

For the purposes of subparagraph 3 of the first paragraph, a corporation is considered to have control of the production and exploitation of a performance if, alone or with other corporations, the corporation is responsible or shares responsibility for the artistic, technical and financial aspects of the performance, including its preproduction, production, marketing and promotion.

For the purposes of subparagraph 6 of the first paragraph, a show given at a private event is a performance that is not almost exclusively presented in public showings.

If there is a succession of particular corporations during the production of a performance, the condition of subparagraph 5 of the first paragraph is deemed to be met provided it appears that the requirement would be met if all the individuals and corporations that provided services to the particular corporations in respect of the production of the performance were taken into account. However, each of the corporations must show, to the satisfaction of the Société de développement des entreprises culturelles, that it is a qualified corporation for the purposes of the tax credit for the production of performances.

CHAPTER VIII

SECTORAL PARAMETERS OF TAX CREDIT FOR BOOK PUBLISHING

DIVISION I

INTERPRETATION AND GENERAL

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

“digital version publishing costs” of a corporation in respect of a work or a group of works means the costs incurred by the corporation that are directly attributable to the publication of a digital version of the work or of a work that is part of the group of works for the purposes of the tax credit for book publishing;

“labour expenditure attributable to preparation costs and digital version publishing costs” of a corporation for a taxation year in respect of a work or a group of works means an expenditure that would be the corporation’s labour expenditure attributable to preparation costs and digital version publishing costs for the year in respect of the work or group of works for the purposes of the tax credit for book publishing if no reference were made to subparagraph c of the fifth paragraph of section 1029.8.36.0.0.13 of the Taxation Act;

“labour expenditure attributable to printing costs” of a corporation for a taxation year in respect of a work or a group of works means an expenditure that would be the corporation’s labour expenditure attributable to printing and reprinting costs for the year, in respect of the work or group of works, for the purposes of the tax credit for book publishing if no reference were made to

(1) paragraph a.1 of the definition of that expression in the first paragraph of section 1029.8.36.0.0.13 of the Taxation Act;

(2) the portion of the remuneration or of the consideration that the corporation has incurred for services rendered to it in Québec for reprinting work concerning that work or group of works; and

(3) subparagraph c of the third paragraph of section 1029.8.36.0.0.13 of that Act;

“publishing costs” of a corporation in respect of a work or a group of works means the costs incurred by the corporation that are printing costs or preparation costs directly attributable to the printing or the preparation of the work or group of works for the purposes of the tax credit for book publishing;

“Québec author” means, subject to the second paragraph, an individual who is an author or who is the editor of a work, or of a work that is part of a group of works written by a team of contributors, and who was resident in Québec at the end of the calendar year that precedes the calendar year in which the publishing work began, or was resident in Québec for at least five consecutive years prior to the beginning of the publishing work;

“tax credit for book publishing” means the fiscal measure provided for in Division II.6.0.0.5 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.

If the work is a translation, only the translator is considered to be the author of the work.

Where a reference is made, in a provision of this chapter, to an amount incurred or paid, including a labour expenditure, costs, a remuneration, a talent fee or an advance, it is to be replaced, if the provision applies in respect of a favourable advance ruling, by a reference to such an amount determined according to a budget.

In this chapter, a reference to a favourable advance ruling is a reference to the document certifying the favourable advance ruling given.

8.2. A corporation must obtain a favourable advance ruling or a qualification certificate from the Société de développement des entreprises culturelles in respect of each work or group of works for which it intends to claim the tax credit for book publishing.

Despite any other provision of this chapter, a favourable advance ruling or a qualification certificate may be given or issued to a corporation in respect of a particular work or group of works only if the corporation is a publishing house recognized by the Société de développement des entreprises culturelles.

DIVISION II

FAVOURABLE ADVANCE RULING AND QUALIFICATION CERTIFICATE

8.3. A qualification certificate must be obtained for a work or a group of works after the first printing of the work or of all the works that are part of the group is completed. If applicable, the qualification certificate confirms the favourable advance ruling given in respect of the work or group of works.

An application by a corporation for the issue of a qualification certificate in respect of a work or a group of works must be filed,

(1) if the work or group of works has been given a favourable advance ruling, within 18 months after the end of the corporation’s taxation year that includes the date of completion of the first printing of the work or of the last work that is part of the group; and

(2) in any other case, within three years after the end of that taxation year.

The Société de développement des entreprises culturelles must revoke a favourable advance ruling given to a corporation in respect of a work or a group of works if the corporation fails to file an application for a qualification certificate in respect of the work or group of works within the time specified in the second paragraph or if such an application is denied. The effective date of the revocation is the date of coming into force of the favourable advance ruling.

8.4. A favourable advance ruling or a qualification certificate that is given or issued to a corporation under this chapter certifies that the work or group of works that is referred to in it is recognized as an eligible work or an eligible group of works of the corporation. It specifies the date of the beginning of publishing work relating to the work or group of works. If applicable, the title of every work that is part of the group is also given in the certificate. In addition, the favourable advance ruling or qualification certificate states that the corporation is a publishing house recognized by the Société de développement des entreprises culturelles.

If applicable, the favourable advance ruling or the qualification certificate also certifies that the digital version of the work or a work that is part of the group of works is recognized as an eligible digital version of that work.

Furthermore, the favourable advance ruling or qualification certificate specifies the filing date of the application for its issue. In the event that the filing date precedes 1 September 2014 but follows 4 June 2014, the Société de développement des entreprises culturelles specifies in the favourable advance ruling or qualification certificate whether or not the work in respect of the work or group of works was sufficiently advanced on that latter date.

If the work or group of works is co-published, the favourable advance ruling or qualification certificate specifies the corporation’s share, expressed as a percentage, of the labour expenditure and publishing costs in respect of the work or group of works for each taxation year for which they were incurred. The corporation’s share must take into account the scope of the responsibilities assumed by the corporation, especially as regards the financial aspect.

For the purposes of this section,

“labour expenditure” in respect of a work or a group of works for a taxation year means the amount that would be obtained if, for each of the items included in the corporation’s labour expenditure attributable to printing costs in respect of the work or group of works for the taxation year and for each of the items included in the corporation’s labour expenditure attributable to preparation costs and digital version publishing costs in respect of the work or group of works for the taxation year, the amounts that the corporation has incurred were replaced by all the amounts incurred in respect of the work or group of works and all those amounts were added together;

“publishing costs” in respect of a work or a group of works for a taxation year means the aggregate of the costs incurred in respect of the work or group of works before the end of the year that are printing costs or preparation costs directly attributable to the printing or the preparation of the work or group of works for the purposes of the tax credit for book publishing, that are digital version publishing costs directly attributable to the publication of a digital version of the work or of a work that is part of the group of works for the purposes of that tax credit or that would be such printing costs, such preparation costs or such digital version publishing costs had they been incurred by the corporation.

8.5. In order for a work to be recognized as an eligible work of a corporation,

(1) the work must be published for commercial exploitation purposes and have a first print run of at least 100 copies;

(2) the work must be by a Québec author or, if it is signed by two or more authors, at least half of them must be Québec authors;

(3) the work must be published in the form of a bound book;

(4) the work must contain at least

(a) 8 pages, if it is a children’s book,

(b) 16 pages, if it is a comic book,

(c) 32 pages, if it is a poetry book, or

(d) 48 pages, if it is any other type of book;

(5) the work must be published under the corporation’s trademark or, if it is intended to be exported, under a third party’s trademark;

(6) the corporation must assume alone or, if applicable, with the other corporations involved in co-publishing the work, all the financial and commercial risks related to publishing the work;

(7) at least 75% of the amount that is the aggregate of the corporation’s publishing costs in respect of the work, other than non-refundable advances paid to Québec authors, must have been paid to individuals who were resident in Québec at the end of the particular calendar year that precedes the calendar year in which the publishing work began or to corporations that had an establishment in Québec in that particular calendar year; and

(8) the work must not be described in section 8.7.

For the purposes of subparagraph 2 of the first paragraph, an individual whose sole role is to illustrate a work is not considered to be an author.

If there is a succession of particular corporations during the publication of a work, the condition of subparagraph 7 of the first paragraph is deemed to be met provided it appears that the requirement would be met if all the individuals and corporations that provided services to the particular corporations in respect of the preparation and printing of the work were taken into account. However, each particular corporation must show to the satisfaction of the Société de développement des entreprises culturelles that it is a qualified corporation for the purposes of the tax credit for book publishing.

8.6. In order for a group of works to be recognized as an eligible group of works of a corporation,

(1) all the works that are part of the group must be wholly published by the same corporation or, in the case of a co-publication, by the same corporations, all of which must be publishing houses recognized by the Société de développement des entreprises culturelles;

(2) the first printing of the last work that is part of the group must be completed within 36 months after the first printing of the first work;

(3) at least 75% of the amount that is the aggregate of the corporation’s publishing costs in respect of the group of works, other than non-refundable advances paid to Québec authors, must have been paid to individuals who were resident in Québec at the end of the particular calendar year that precedes the calendar year in which the publishing work began or to corporations that had an establishment in Québec in that particular calendar year;

(4) the requirements of the first paragraph of section 8.5, other than the requirement of subparagraph 7 of that paragraph, must be met in respect of each work that is part of the group; and

(5) no one work in the group must have entailed preparation and printing costs that are inordinate when compared with those incurred for the other works in the group.

If there is a succession of particular corporations during the publication of a group of works, the condition of subparagraph 3 of the first paragraph is deemed to be met provided it appears that the requirement would be met if all the individuals and corporations that provided services to the particular corporations in respect of the preparation and printing of the group of works were taken into account. However, each particular corporation must show to the satisfaction of the Société de développement des entreprises culturelles that it is a qualified corporation for the purposes of the tax credit for book publishing.

8.6.1. In order for the digital version of a work produced by a corporation to be recognized as an eligible digital version of the work,

(1) the work must be recognized as an eligible work or be part of a group of works that is recognized as an eligible group of works;

(2) the corporation must hold the publishing rights to the digital version of the work and provide proof of that fact to the Société de développement des entreprises culturelles;

(3) the application for recognition of the digital version of the work must be filed with the Société de développement des entreprises culturelles at the same time as the application for a favourable advance ruling or, in the absence of such an application, the application for a qualification certificate in respect of the work or the group of works of which the work is part; and

(4) at least 75% of the amount that is the aggregate of the corporation’s digital version publishing costs in respect of the work or the group of works of which the work is part must have been paid to individuals who were resident in Québec at the end of the particular calendar year preceding the calendar year in which the digital version publishing work began or to corporations that had an establishment in Québec in that particular calendar year.

If there is a succession of particular corporations during the publication of a work or a group of works, the requirement of subparagraph 4 of the first paragraph is deemed to be met provided it appears that it would be met if all the individuals and corporations that provided services to the particular corporations in respect of the publication of the digital version of the work or of any work that is part of the group of works were taken into account. However, each particular corporation must show to the satisfaction of the Société de développement des entreprises culturelles that it is a qualified corporation for the purposes of the tax credit for book publishing.

8.7. A work to which subparagraph 8 of the first paragraph of section 8.5 refers is

(1) a work that is a periodical publication, including a work that is updated on an ongoing basis;

(2) a work that contains advertising, other than advertising aimed at promoting the publishing products of the corporation referred to in the first paragraph of section 8.2;

(3) a work that is a directory, a calendar, a day planner, a catalogue, a drawing book, a colouring book, a workbook or any other work which, by its very nature, will become obsolete or may be used only once;

(4) a work whose pages are typewritten, photocopied, mimeographed or handwritten;

(5) a work that encourages sexism, violence or discrimination; or

(6) a work published for promotional or business purposes.

DIVISION III

RECOGNITION OF A PUBLISHING HOUSE

8.8. A corporation may be recognized as a publishing house by the Société de développement des entreprises culturelles if

(1) it edits and publishes books;

(2) its main activity consists in publishing for commercial purposes, with a view to achieving profitability;

(3) it has entered into contracts with one or more authors or copyright holders to publish their works or the works in which they hold the copyright;

(4) it commercializes the works it publishes; and

(5) it has a collection of at least three works by Québec authors who have no interest in the affairs of the publishing house.

CHAPTER IX

SECTORAL PARAMETERS OF TAX CREDIT FOR PRODUCTION OF MULTIMEDIA EVENTS OR ENVIRONMENTS PRESENTED OUTSIDE QUÉBEC

DIVISION I

INTERPRETATION AND GENERAL

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

“labour expenditure” of a corporation for a taxation year in respect of a multimedia event or environment means an expenditure that would be the corporation’s labour expenditure for the year in respect of the multimedia event or environment for the purposes of the tax credit for the production of multimedia events or environments presented outside Québec if no reference were made to subparagraph d of the second paragraph of section 1029.8.36.0.0.12.1 of the Taxation Act;

“production costs” of a corporation at a particular time in respect of a multimedia event or environment means the aggregate of the costs incurred by the corporation in respect of the multimedia event or environment on or before that time that are production costs referred to in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.36.0.0.12.1 of the Taxation Act before subparagraph 1;

“tax credit for the production of multimedia events or environments presented outside Québec” means the fiscal measure provided for in Division II.6.0.0.4.1 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.

Any reference made, in a provision of this chapter, to an amount incurred or paid, including a labour expenditure, costs, a remuneration, a talent fee or an advance, is to be replaced, if the provision applies in respect of a favorable advance ruling, by a reference to such an amount determined according to a budget.

In this chapter, a reference to a favourable advance ruling is a reference to the document certifying the favourable advance ruling given.

9.2. A corporation must obtain a favourable advance ruling or a qualification certificate from the Société de développement des entreprises culturelles in respect of each multimedia event or environment for which it intends to claim the tax credit for the production of multimedia events or environments presented outside Québec.

DIVISION II

FAVOURABLE ADVANCE RULING AND QUALIFICATION CERTIFICATE

9.3. A qualification certificate must be obtained for a multimedia event or environment following its first presentation before an audience outside Québec. If applicable, the qualification certificate confirms the favourable advance ruling given in respect of the multimedia event or environment.

An application by a corporation for the issue of a qualification certificate in respect of a multimedia event or environment must be filed,

(1) if the multimedia event or environment has been given a favourable advance ruling, within 18 months after the end of the corporation’s taxation year that includes the date of its first presentation before an audience outside Québec; and

(2) in any other case, within three years after the end of that taxation year.

The Société de développement des entreprises culturelles must revoke a favourable advance ruling given to a corporation in respect of a multimedia event or environment if the corporation fails to file an application for a qualification certificate in its respect within the time specified in the second paragraph or if such an application is denied. The effective date of the revocation is the date of coming into force of the favourable advance ruling.

9.4. A favourable advance ruling or a qualification certificate given or issued to a corporation under this chapter certifies that the multimedia event or environment referred to in it is recognized as a qualified production of the corporation. It also specifies the filing date of the application for its issue. In the event that the filing date precedes 1 September 2014 but follows 4 June 2014, the Société de développement des entreprises culturelles specifies in the favourable advance ruling or qualification certificate whether or not the work in respect of the multimedia event or environment was sufficiently advanced on that latter date.

If the multimedia event or environment is a co-production, the favourable advance ruling or qualification certificate specifies the corporation’s share, expressed as a percentage, of the labour expenditure and production costs in its respect for each taxation year for which they were incurred. The corporation’s share must reflect, in respect of the multimedia event or environment, the corporation’s production costs at the end of the year and the corporation’s labour expenditure for the year, and take into account the scope of the responsibilities assumed by the corporation in the co-production.

For the purposes of this section,

“labour expenditure” in respect of a multimedia event or environment, for a taxation year, means the amount that would be obtained if, for each of the items included in the corporation’s labour expenditure, in respect of the multimedia event or environment, for the taxation year, the amounts that the corporation has incurred were replaced by all the amounts incurred in its respect and all those amounts were added together;

“production costs” in respect of a multimedia event or environment, for a taxation year, means the aggregate of the costs incurred in respect of the multimedia event or environment, before the end of the year, that are production costs described in the portion of subparagraph i of paragraph b of the definition of “qualified labour expenditure” in the first paragraph of section 1029.8.36.0.0.12.1 of the Taxation Act that precedes subparagraph 1, or that would be such production costs had they been incurred by the corporation.

9.5. In order for a multimedia event or environment to be recognized as a qualified production of a corporation,

(1) the multimedia event or environment must offer an educational or cultural experience and be presented for entertainment purposes not advertising purposes;

(2) in the case of a multimedia event, it must be reasonable to expect that, over a period of three years beginning on its first presentation before an audience, it be presented principally in places of amusement situated outside Québec;

(3) in the case of a multimedia environment, it must be produced under a contract that concerns the design and production of such an environment to be presented outside Québec and that the corporation entered into with a person with whom the corporation deals at arm’s length;

(4) the multimedia event or environment must obtain, in respect of its creative personnel, a minimum of five points out of nine, calculated by awarding the number of points specified in the second paragraph for a particular function of that personnel only if the individual who wholly performs the function was resident in Québec at the end of the particular calendar year that precedes the calendar year in which production work relating to the multimedia event or environment began;

(5) the production of the multimedia event or environment must be under the control of the corporation, which must demonstrate, to the satisfaction of the Société de développement des entreprises culturelles, that it is a qualified corporation for the purposes of the tax credit for the production of multimedia events or environments presented outside Québec; and

(6) at least 75% of the amount that is the corporation’s production costs in respect of the multimedia event or environment, other than the remuneration paid to an individual who performs a function referred to in any of subparagraphs 1 to 9 of the second paragraph, must have been paid to individuals who were resident in Québec at the end of the particular calendar year that precedes the year in which production work relating to the multimedia event or environment began or to corporations that had an establishment in Québec in that particular calendar year.

For the purposes of the first paragraph, the following number of points may be allotted to a multimedia event or environment in respect of an individual:

(1) for the lighting designer, one point;

(2) for the designer, one point;

(3) for the environment designer, one point;

(4) for the graphic designer, one point;

(5) for the content and project manager for audiovisual and sound, one point;

(6) for the programmer, one point;

(7) for the writer, one point;

(8) for the scriptwriter, one point; and

(9) for the scenographer, one point.

For the purposes of this section, the following rules apply:

(1) where an individual performs more than one of the functions referred to in subparagraphs 1 to 9 of the second paragraph, the point awarded for each function the individual performs must, subject to subparagraph 4 of the first paragraph, be taken into account; and

(2) where a function referred to in any of subparagraphs 1 to 9 of the second paragraph is performed by two or more individuals, the point awarded for that function must be taken into account, despite subparagraph 4 of the first paragraph, if the condition of that subparagraph 4 would be met in respect of at least half of the individuals were that subparagraph read without reference to “wholly”.

For the purposes of subparagraph 5 of the first paragraph, a corporation is considered to have control of the production of a multimedia event if, alone or with other corporations, the corporation is responsible or shares responsibility for the artistic, technical and financial aspects of the multimedia event or environment, including its production, marketing and promotion. The same applies with respect to the control of the production of a multimedia environment, except that the responsibilities assumed or shared by the corporation do not include the marketing and promotion of the multimedia environment.

For the purposes of the first paragraph, a place of amusement means premises or a place, including a museum, where an event or an exhibition will be presented.

If there is a succession of particular corporations during the production of a multimedia event or environment, the condition of subparagraph 6 of the first paragraph is deemed to be met provided it appears that the condition would be met if all the individuals and corporations that provided services to the particular corporations in respect of the production were taken into account. However, each of the corporations must show, to the satisfaction of the Société de développement des entreprises culturelles, that it is a qualified corporation for the purposes of the tax credit for the production of multimedia events or environments presented outside Québec.

9.6. The Société de développement des entreprises culturelles is justified in revoking the favourable advance ruling given or the qualification certificate issued to a corporation in respect of a particular multimedia event, if it is evident, at the end of the period provided for in subparagraph 2 of the first paragraph of section 9.5, that the corporation has failed to meet the condition of that subparagraph. The effective date of the revocation is the date of coming into force of the revoked document. The revocation of a qualification certificate for that reason entails the revocation of any related favourable advance ruling.

2012, c. 1, Schedule H; 2013, c. 10, ss. 199 to 212; 2015, c. 21, ss. 574 to 589; 2015, c. 36, ss. 184 to 194; 2017, c. 1, ss. 422 to 430; 2017, c. 29, s. 232; 2019, c. 14, ss. 502 to 518; 2021, c. 14, ss. 210 and 211.

SCHEDULE I

MINISTER OF CULTURE AND COMMUNICATIONS

CHAPTER I

MEASURES COVERED BY THIS SCHEDULE

1.1. The Minister of Culture and Communications administers the sectoral parameters of the following fiscal measures:

(1) the increase of the eligible amount of a gift of a work of public art provided for in sections 716.0.1.1, 716.0.1.2, 752.0.10.15.1 and 752.0.10.15.2 of the Taxation Act (chapter I 3); and

(2) the increase of the eligible amount of a gift of an immovable intended for cultural purposes provided for in sections 716.0.1.1 and 752.0.10.15.1 of the Taxation Act.

CHAPTER II

SECTORAL PARAMETERS OF INCREASE OF ELIGIBLE AMOUNT OF GIFT OF WORK OF PUBLIC ART

DIVISION I

INTERPRETATION AND GENERAL

2.1. In this chapter, “increase of the eligible amount of a gift of a work of public art” means

(1) the fiscal measure provided for either in section 716.0.1.1 of the Taxation Act, under which the eligible amount of a gift described in subparagraph 2 of subparagraph i of subparagraph b of the second paragraph of section 716.0.1.1 of that Act that a corporation may deduct in computing its taxable income for a taxation year is increased, or in section 752.0.10.15.1 of that Act, under which the eligible amount of a gift described in subparagraph 2 of subparagraph i of subparagraph b of the second paragraph of section 752.0.10.15.1 of that Act that an individual may deduct from the individual’s tax otherwise payable for a taxation year is increased; or

(2) the fiscal measure provided for either in section 716.0.1.2 of the Taxation Act, under which the eligible amount of a gift described in the second paragraph of section 716.0.1.2 of that Act that a corporation may deduct in computing its taxable income for a taxation year is increased, or in section 752.0.10.15.2 of that Act, under which the eligible amount of a gift described in the second paragraph of section 752.0.10.15.2 of that Act that an individual may deduct from the individual’s tax otherwise payable for a taxation year is increased.

2.2. To benefit from an increase of the eligible amount of a gift of a work of public art, a person must obtain the following certificates from the Minister:

(1) a certificate relating to the acquisition and conservation of the work in a public space (in this chapter referred to as a “conservation in a public space certificate”), where the fiscal measure described in paragraph 1 of the definition of "increase of the eligible amount of a gift of a work of public art" in section 2.1 applies; or

(2) a certificate relating to the installation and conservation of the work in an educational space (in this chapter referred to as a “conservation in an educational space certificate”), where the fiscal measure described in paragraph 2 of the definition of “increase of the eligible amount of a gift of a work of public art” in section 2.1 applies.

DIVISION II

CONSERVATION IN A PUBLIC SPACE CERTIFICATE

2.3. A conservation in a public space certificate issued to a person certifies that the work of public art referred to in the certificate has been acquired to be installed in a public space by a municipality in Québec or a municipal or public body performing a function of government in Québec, other than a school service centre or a school board, in accordance with its policy on the acquisition and conservation of works of public art.

DIVISION III

CONSERVATION IN AN EDUCATIONAL SPACE CERTIFICATE

2.4. A conservation in an educational space certificate issued to a person certifies that the work of public art referred to in the certificate has been acquired to be installed in a place accessible to students and that its conservation will be ensured.

CHAPTER III

SECTORAL PARAMETERS OF INCREASE OF ELIGIBLE AMOUNT OF GIFT OF IMMOVABLE INTENDED FOR CULTURAL PURPOSES

DIVISION I

INTERPRETATION AND GENERAL

3.1. In this chapter,

“artists’ studio” means non-residential premises occupied by one or more artists, artisans or craftspersons and set up so that they may create, produce, rehearse or do things there with a view to making an artistic work or art objects;

“eligible donee” means

(1) a municipality in Québec;

(2) a municipal or public body performing a function of government in Québec;

(3) a registered charity, within the meaning of section 1 of the Taxation Act, operating in Québec for the benefit of the community or in the field of arts or culture;

(4) a registered cultural or communications organization, within the meaning of section 1 of Taxation Act; or

(5) a registered museum, within the meaning of section 1 of the Taxation Act;

“increase of the eligible amount of a gift of an immovable intended for cultural purposes” means the fiscal measure provided for either in section 716.0.1.1 of the Taxation Act, under which the eligible amount of a gift described in subparagraph ii of subparagraph b of the second paragraph of section 716.0.1.1 of that Act that a corporation may deduct in computing its taxable income for a taxation year is increased, or in section 752.0.10.15.1 of that Act, under which the eligible amount of a gift described in subparagraph ii of subparagraph b of the second paragraph of section 752.0.10.15.1 of that Act in respect of which an individual may deduct an amount from the individual’s tax otherwise payable for a taxation year is increased.

3.2. To benefit from an increase of the eligible amount of a gift of an immovable intended for cultural purposes, a person must obtain either of the following qualification certificates from the Minister:

(1) a qualification certificate in respect of a building capable of housing artists’ studios (in this chapter referred to as an “artists’ studios qualification certificate”); or

(2) a qualification certificate in respect of a building capable of housing cultural organizations (in this chapter referred to as a “cultural premises qualification certificate”).

DIVISION II

ARTISTS’ STUDIOS QUALIFICATION CERTIFICATE

3.3. An artists’ studios qualification certificate issued to a person certifies that the building referred to in the certificate is recognized as a building capable of housing artists’ studios.

3.4. A building may be recognized as a building capable of housing artists’ studios if

(1) it has been acquired by an eligible donee who intends to set up premises, intended mainly to serve as artists’ studios, that will be offered for rent at affordable price ranges;

(2) it has at least 1,000 square metres of floor space that can be set up as artists’ studios;

(3) its geographical location makes it a suitable place for artists’ studios; and

(4) its conversion into artists’ studios is a feasible project that can contribute to the establishment and long-term viability of artists’ studios in an urban setting.

DIVISION III

CULTURAL PREMISES QUALIFICATION CERTIFICATE

3.5. A cultural premises qualification certificate issued to a person certifies that the building referred to in the certificate is recognized as a building capable of housing cultural organizations.

3.6. A building may be recognized as a building capable of housing cultural organizations if

(1) it has been acquired by an eligible donee who intends to set up mainly premises that will be offered for rent at affordable price ranges to registered charities operating in the field of arts or culture, to registered cultural or communications organizations or to registered museums; and

(2) its conversion for the purposes described in paragraph 1 is a feasible project.

For the purposes of the first paragraph, “registered charity”, “registered cultural or communications organization” and “registered museum” have the meaning assigned by section 1 of the Taxation Act.

2015, c. 21, s. 590; 2020, c. 1, s. 310.