What’s Changing? Quebec’s CDAE (E-Business Development Tax Credit) will become the CDAEIA (AI-Enhanced E-Business Development Tax Credit) for fiscal years starting after December 31, 2025.

Key Transition: The program moves from broad e-business support to targeted AI innovation funding, totaling $271.5M over five years.

Tax Credit Rate: The overall 30% rate remains, but the breakdown changes:

  • 2025: 23% refundable, 7% non-refundable

  • 2026: 22% refundable, 8% non-refundable

  • 2027: 21% refundable, 9% non-refundable

  • 2028+: 20% refundable, 10% non-refundable

New Eligibility Requirements

  • What Qualifies

    • AI applications using machine learning or neural networks
    • Data processing and hosting (NAICS 51821) [NEWLY ADDED]
    • Developing and training AI models
    • Integrating AI systems to automate business processes
    • Personalized customer experience solutions
    • Big data analysis with AI components

  • What No Longer Qualifies

    1. System maintenance activities
    • Infrastructure upgrades (even if related)
    • General IT support without AI integration
    • Routine software updates

EMPLOYEE REQUIREMENTS

  • At least 6 full-time
    eligible employees
  • 75% of time dedicated to
    AI-related activities
  • Labor expenses must exceed the basic personal amount threshold

REVENUE CRITERIA

  • 75% of revenue from IT/AI activities
  • 50% of employees in eligible technical roles
  • Enhanced criteria tailored for AI business models, including hosting/data processing

Implementation Timeline & Action Plan

IMMEDIATE ACTIONS (2025 – Transition Year)

  • Audit current projects to identify AI integration opportunities

  • Document AI components in your ongoing development work

  • Reclassify activities to highlight AI-driven features

  • Train your teams on new documentation standards
  • Set up tracking systems for AI-specific development hours

2026+ OPTIMIZATION

  • Align your project portfolio across CDAEIA and SR&ED programs
  • Structure R&D activities to capture both experimental (SR&ED) and implementation (CDAEIA) work
  • Maintain thorough documentation to prove the significance of AI integration

Competitive Advantage Opportunities

Future-Proofing Benefits

  • Early AI adoption helps you avoid losing credits during the transition
  • Showcases your innovation leadership to clients and investors
  • Protects and increases your refundable credits through FY26 and beyond

PORTFOLIO STRATEGY BY COMPANY STAGE

Early-Stage (<$1M): Focus on SR&ED for experimental AI research

Growth-Stage ($1M-$10M): Combine CDAEIA for implementation with SR&ED for R&D

Mature ($10M+): Strategically balance both programs and leverage capital expenditure benefits

How Boast Maximizes Your CDAEIA Success

Transition Support

  • Project Reclassification: Position your current work to highlight AI integration
  • Proactive FY26 Planning: Build CDAEIA compliance into your workflows now
  • Documentation Excellence: Be audit-ready with detailed tracking of AI activities
  • Flexible Pricing: Transition smoothly with pricing structures that match your growth

Strategic Optimization

  • Dual Program Management: Maximize benefits from both CDAEIA and SR&ED
  • Lifecycle Alignment: Match your funding strategy to your company’s growth stage
  • Compliance Assurance: Navigate changing requirements with expert support
  • ROI Maximization: Structure projects strategically to capture the most credits

Next Steps

  • Book a Strategy Session to explore your AI integration opportunities
  • Review Current CDAE Claims for potential reclassification
  • Develop an FY26 Compliance Plan with Boast’s expert guidance
  • Implement Documentation Systems for a seamless CDAEIA transition

Ready to optimize your Quebec AI tax credit strategy?

Contact Boast today to make sure you capture every available dollar and stay fully compliant with CDAEIA requirements.

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