Introduction

Quebec’s shift to CDAE-IA doesn’t just change what activities qualify—it fundamentally transforms how you should think about technical hiring, team composition, and employee certification. CFOs and CTOs need a coordinated talent and funding strategy.

The transition from CDAE to CDAE-IA creates a strategic inflection point for Quebec tech companies. While most discussions focus on AI integration requirements, the program’s employee eligibility criteria present equally significant implications for how you build, structure, and retain your technical teams.

For organizations claiming $100,000+ annually in tax credits, employee-related decisions directly impact funding access. Hiring the wrong roles, inadequate time tracking, or certification delays can cost tens of thousands in lost credits. Conversely, strategic talent planning aligned with CDAE-IA requirements maximizes both your innovation capabilities and your funding recovery.

Understanding the Six-Employee Threshold

CDAE-IA maintains the requirement for at least six eligible full-time employees devoted primarily to qualifying activities. This isn’t simply a headcount test—it’s a strategic minimum that shapes team composition and resource allocation.

What “eligible employee” means under CDAE-IA:

  • Employees working at least 75% of their time on qualifying AI-integrated e-business activities

  • Individuals holding valid employee eligibility certificates from Investissement Québec

  • Team members whose work directly relates to development, integration, or enhancement of AI-enabled systems

  • Staff performing activities tied to eligible NAICS codes (513211, 513212, 51821, 541514, 541515)

Who doesn’t count toward the threshold:

  • Contractors and consultants (regardless of technical expertise)
  • Employees spending majority time on excluded maintenance activities
  • Administrative, sales, or operational staff
  • Technical employees working primarily on internal IT systems rather than commercialized products

For smaller teams, losing even one eligible employee can jeopardize your entire CDAE-IA eligibility. This makes retention strategy and backup planning critical components of your funding approach.

The New Math: Salary Thresholds Replace Caps

One of CDAE-IA’s most significant changes involves how employee compensation affects credit calculations. The previous $83,333 salary cap is eliminated, but a new exclusion threshold applies.

How the exclusion threshold works:

  • The first $18,571 of each eligible employee’s annual salary (indexed annually) does not qualify
  • Only salary amounts above this threshold generate tax credits
  • There is no upper limit on eligible salary amounts

Strategic implications:

For an AI engineer earning $120,000 annually:

  • Excluded amount: $18,571
  • Eligible salary: $101,429
  • 2026 credit potential: ~$30,429 (22% refundable + 8% non-refundable)

For a senior machine learning specialist earning $150,000:

  • Excluded amount: $18,571
  • Eligible salary: $131,429
  • 2026 credit potential: ~$39,429

This structure fundamentally changes hiring economics. Companies benefit more from employing highly compensated AI specialists than from spreading work across multiple junior developers. The removal of the salary cap particularly advantages organizations competing for senior technical talent in competitive markets.

Hiring for CDAE-IA Eligibility

Prioritize AI-Specialized Roles

Under CDAE-IA, generic software development no longer guarantees eligibility. Your hiring strategy should emphasize roles directly tied to AI integration:

High-value roles:

  • Machine learning engineers developing and implementing ML models
  • Data scientists building predictive analytics and intelligent systems
  • AI/ML architects designing systems that integrate neural networks and automated decision-making
  • MLOps engineers maintaining and optimizing AI infrastructure
  • Research scientists advancing AI capabilities within your products

Supporting technical roles:

  • Full-stack developers working on AI-enabled features (not routine maintenance)
  • Data engineers building pipelines that feed AI systems
  • DevOps specialists supporting AI model deployment and monitoring
  • Software engineers implementing AI-driven automation

Excluded or limited eligibility:

  • General web developers working on non-AI features
  • IT support and internal systems administrators
  • QA testers performing routine testing (vs. AI model validation)
  • Project managers and product managers (unless performing technical work)

Structure Job Descriptions for Certification Success

Investissement Québec reviews employee eligibility based on actual duties, not job titles. Your job descriptions, offer letters, and performance expectations should clearly articulate AI-related responsibilities.

Effective job description elements:

  • Specific AI technologies the role will work with (TensorFlow, PyTorch, neural networks, NLP models)
  • Clear connection to qualifying activities (e.g., “develop machine learning models for customer recommendation engine”)
  • Percentage of time dedicated to eligible vs. excluded work
  • Deliverables tied to AI integration rather than general software development

Vague descriptions like “develop software solutions” create certification challenges. Specific language like “design and implement neural network architectures for predictive analytics” establishes clear eligibility.

The 75% Rule: Time Allocation Strategy

Eligible employees must spend at least 75% of their time on qualifying activities. This seemingly simple requirement becomes complex in practice, especially for roles spanning multiple responsibilities.

What Counts as Eligible Time

Your project must generate new knowledge that advances the understanding of science or technology. This isn’t about using existing technology—it’s creating something genuinely new or improving existing capabilities beyond what’s currently known.

Qualifying activities:

  • Developing AI models, algorithms, and intelligent automation systems
  • Integrating machine learning capabilities into existing platforms
  • Building data processing infrastructure supporting AI functionality
  • Designing and implementing neural networks
  • Creating predictive analytics and decision-support systems
  • Conducting applied AI research directly supporting product development

Excluded activities:

  • Routine bug fixes and maintenance work
  • Internal IT support and infrastructure not supporting AI products
  • General administrative tasks and meetings
  • Training unrelated to AI development
  • Sales, marketing, and business development activities

Time Tracking Best Practices

Accurate time allocation documentation is non-negotiable. During audits or certification reviews, you must demonstrate that eligible employees genuinely spend 75%+ of their time on qualifying work.

Implementation strategies:

  • Implement project-based time tracking with clear AI vs. non-AI categorization
  • Use timesheet systems that automatically calculate the 75% threshold
  • Conduct quarterly reviews to identify employees at risk of falling below the threshold
  • Reallocate responsibilities when employees approach the 75% boundary
  • Maintain detailed project descriptions linking work to eligible activities

For mixed-role employees, consider whether restructuring responsibilities to create dedicated AI-focused positions might improve overall credit capture while reducing documentation complexity.

Certification Process: Navigating Investissement Québec

Organization Certification

Before any employee qualifies, your corporation needs an organizational eligibility certificate demonstrating:

At least

75%

of gross revenue

from IT sector activities

At least

50%

of gross revenue

from eligible NAICS codes

75%

of gross revenue

from third-party services or applications used outside Quebec

  • Quebec establishment and proper corporate structure

This certificate establishes your fundamental eligibility and must be renewed for each taxation year.

Employee Certification

Each eligible employee requires an individual certificate from Investissement Québec. The application process requires:

Required documentation:

  • Detailed job description outlining AI-related responsibilities
  • Employment contract or offer letter
  • Organizational chart showing the employee’s role
  • Project descriptions demonstrating connection to eligible activities
  • Time allocation estimates showing 75%+ qualifying work

Processing timeline considerations:

  • Initial applications can take 6-8 weeks for review
  • Incomplete applications extend processing time significantly
  • Retroactive certification is possible but creates uncertainty
  • Early filing ensures credits aren’t delayed by certification gaps

Strategic approach:

  • Submit organizational certificate renewal early in fiscal year
  • File employee certificates immediately upon hiring
  • Maintain a pipeline of pre-certified roles for rapid hiring
  • Document everything contemporaneously rather than reconstructing later

Retention Strategy: Protecting Your Eligibility

Losing eligible employees creates dual challenges: operational disruption and funding jeopardy. If your headcount drops below six eligible employees, your entire CDAE-IA eligibility disappears until you rebuild the team.

Financial Incentives Aligned with Credit Value

Consider structuring compensation to reflect the funding value employees generate:

For a senior AI specialist generating $40,000 in annual credits, their “fully loaded” value to your organization includes both their technical contribution and their funding impact. This justifies competitive compensation packages that might otherwise seem expensive.

Career Development Tied to AI Expertise

Employees value growth opportunities. Creating clear advancement paths tied to AI skill development serves both retention and eligibility goals:

  • Training programs focused on advanced AI/ML techniques
  • Conference attendance and continued education in AI
  • Mentorship from senior AI specialists
  • Opportunities to work on cutting-edge AI projects

These investments improve retention while deepening the AI expertise that strengthens CDAE-IA qualification.

Succession Planning for Critical Roles

Never operate at exactly six eligible employees. This leaves no buffer for turnover, sabbaticals, or reallocation to excluded activities. A more resilient approach maintains 7-9 eligible employees, ensuring temporary gaps don’t jeopardize eligibility.

Avoiding Common Pitfalls

The Contractor Trap

Many tech companies rely heavily on contractors for specialized AI work. This creates a significant CDAE-IA vulnerability: contractors don’t count toward the six-employee minimum and their costs aren’t eligible for credits.

Strategic response

  • Convert critical contractor roles to full-time employment where feasible
  • Use contractors for short-term projects but maintain core eligible employee base
  • Recognize that contractor cost savings may be offset by lost tax credits

The Maintenance Exclusion

CDAE-IA explicitly excludes routine maintenance and evolutionary work. Employees spending significant time on bug fixes, system monitoring, patches, and incremental updates may not qualify.

Risk mitigation

  • Separate development teams from maintenance teams where possible
  • Rotate maintenance responsibilities to prevent any single employee from exceeding the 25% threshold
  • Clearly distinguish between “maintenance” and “AI enhancement” in project planning

Documentation Gaps

The most common certification failure involves inadequate documentation of AI-related work. Generic project descriptions, missing time tracking, or vague job responsibilities create approval challenges.

Prevention strategy

  • Implement documentation standards before hiring
  • Train managers on certification requirements
  • Conduct internal audits quarterly to identify gaps
  • Maintain contemporaneous records rather than reconstructing later

Integration with Broader Talent Strategy

CDAE-IA considerations shouldn’t exist in isolation from your overall talent approach. The most successful organizations integrate funding requirements into comprehensive people strategies.

Key integration points:

Recruiting

Screen candidates for roles most likely to achieve certification

Onboarding

Educate new hires about time tracking and eligible activities

Performance management

Include CDAE-IA eligibility maintenance in employee goals

Organizational design

Structure teams to optimize both operational effectiveness and funding capture

Compensation

Factor credit value into total compensation planning

This integration ensures funding considerations enhance rather than constrain your talent strategy.

Working with Boast: Simplified Certification & Tracking

Managing CDAE-IA employee eligibility involves coordinating HR systems, time tracking, certification applications, and ongoing compliance monitoring. Boast’s platform automates these workflows while our specialized team guides you through Investissement Québec requirements.

Our system automatically tracks employee time allocation against the 75% threshold, flags certification renewal deadlines, and maintains audit-ready documentation. More importantly, our Quebec tax credit specialists help structure your talent strategy to maximize both operational effectiveness and funding recovery.

Whether you’re building your first eligible team or optimizing an existing structure, Boast ensures you capture every available credit while maintaining full compliance with evolving requirements.

Ready to optimize your CDAE-IA talent strategy? Connect with our team to assess your current approach, identify opportunities, and implement systems that make eligibility management effortless.