Note : This content applies for the financial years starting before January 1, 2025. After that date, the new CDAEIA program enhanced it with the requirement of a “significative part of AI”. We added to this page comparisons between the two programs.
The E-Business tax credit is a Quebec government incentive administered by Investissement Québec to support companies operating in the information technology and digital services sectors. It provides a refundable tax credit of 24% plus a non-refundable credit of 6%, for a total 30% on eligible employee salaries.
Also named CDAE, from its original French name Crédit au Développement des Affaires Électroniques, the program is designed for companies developing or integrating e-business solutions such as ERP systems, e-commerce platforms, SaaS applications, and digital infrastructure. It also covers activities related to system evolution and maintenance of such systems.
Eligible salaries are capped at $83,333 per employee, allowing up to $20,000 refundable and $5,000 non-refundable credits per employee annually.
By significantly reducing labor costs, the CDAE helps companies scale operations, invest in digital innovation, and strengthen competitiveness in areas such as AI and cybersecurity.
The E-Business (CDAE) tax credit is designed for companies whose core activities are in information technology and digital services.
It primarily benefits businesses that:
To benefit, companies must have a structured and consistent IT activity base, not occasional or secondary digital work. In practice, this means the majority of revenue and operations must be tied to eligible IT activities.
The CDAE is particularly advantageous for:
Even companies already claiming Canada Revenue Agency SRED can benefit. When properly structured, CDAE can complement other incentives and significantly increase total tax recovery.
To qualify for the E-Business (CDAE) tax credit, companies must meet strict financial and operational criteria:
In addition to complying with all required revenue ratios, the company must maintain a permanent establishment in Quebec.
These criteria are strictly enforced by Investissement Quebec, and failure to meet any one of them will disqualify the entire claim.
The E-Business tax credit can also be combined with Canada Revenue Agency SR&ED and other incentives, allowing companies to recover up to ~84% of eligible salaries when properly structured.
While both E-Business and SR&ED are tax incentives, they serve different purposes and target different types of activities.
CDAE tax credit supports business-driven digital production, while SRED supports innovation-driven research activities.
In many cases, companies can benefit from both programs simultaneously, maximizing their total tax recovery.
CDAEIA is the evolution of the CDAE program that focuses specifically on artificial intelligence.
CDAE tax credit applies to general digital business activities, while CDAEIA targets companies working specifically in artificial intelligence and advanced data solutions.
To qualify for CDAEIA, companies that used to claim CDAE have a big hurdle to overcome: to integrate a significant portion of artificial intelligence.
The CDAE tax credit is calculated based on eligible employee salaries.
The structure typically includes:
Eligible salaries are subject to an annual cap per employee.
If an employee earns $80,000 in eligible salary:
Total potential credit: $24,000
The total dollar claim depends on:
Applying for the E-Business tax credit or CDAE involves multiple steps and coordination with government authorities.
Maintain detailed records of employee time and project involvement.
Submit an application to confirm that your company qualifies for the program.
Ensure that eligible employees are properly classified and documented.
Investissement Québec reviews financial documents (financial statements, trial balances, sales journals, contracts, invoices, timesheets, etc.) to verify eligibility and may conduct a company visit, either in person or via videoconference.
Pay the required fees to Investissement Québec for the certificates.
Include the CO-1029.8.36.DA tax schedules and certificates in your corporate tax return.
Due to the complexity of the process, many companies rely on specialized consultants to ensure accuracy and maximize their claim.
Emergex is the business consulting firms that possibly filed the greatest number of E-Business tax credit claims with Investissement Quebec since the program’s creation in 2008.
Maximizing your CDAE or E-Business claim requires more than just meeting eligibility criteria. It requires strategy, planning, organization, documentation, and optimization.
Emergex consultants help you:
We do not just prepare your claim: we optimize it to ensure you receive the maximum benefit available with as little bureaucratic pain as possible.
Emergex assists technology companies in claiming both refundable and non-refundable CDAE tax credits.
Several factors can compromise CDAE eligibility. Emergex provides guidance to avoid pitfalls and ensure certification:
Beyond the CDAE tax credit, other government programs can help grow your company. Entrusting Emergex with these claims ensures maximum global ROI:
If you need cash to finance software development, different options are available: banks, institutions specialized in financing tax credits, loan guarantees, and direct financing by Investissement Québec. Emergex can help:
Navigating the CDAE tax credit can be challenging. Our team helps medium-sized tech companies:
If you are a Quebec-based company moving from CDAE to CDAEIA, we can guide you through every step of this complex process.
Ask us anything!
The E-Business tax credit, offered by the Quebec government, supports companies with a website or online presence. It is designed to encourage businesses to invest in or adopt technology, including e-commerce, to improve operations and reach new customers.
The program covers eligible projects in software publishing, system development, and secure business processes that generate measurable economic benefits.
To qualify for the E-Business tax credit, a company must have a permanent establishment in Quebec and be actively engaged in business. Additionally, the company must maintain a website or online presence used to sell goods or services, or to communicate with customers and clients.
Eligibility also requires that the company meet the 75% and 50% revenue ratio tests and maintain at least six full-time employees. For practical examples, see our related articles.
There are many R&D assistance programs available, but one of the largest in Canada is the Scientific Research and Experimental Development (SR&ED) tax credit.
The SR&ED tax credit is a federal program that supports businesses conducting research and development activities in Canada. Most provinces complement the federal program by providing additional funding to companies with a local establishment.
This tax credit can be claimed for expenses related to the development of new or improved products, processes, materials, or software.
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