Claim your CDAEIA tax credits for the Development of E-Business integrating Artificial Intelligence

What is the CDAEIA tax credit?

The CDAEIA (Tax Credit for the Development of E-Business integrating Artificial Intelligence) is Québec’s updated incentive to support companies in digital transformation. It replaces and expands the older CDAE program by integrating a strong artificial intelligence (AI) component.

In practical terms, this partly refundable tax credit reduces the cost of hiring and retaining skilled employees in IT and AI. Businesses can claim a percentage of eligible salaries and certain expenses, directly improving their cash flow.

What are the objectives of the CDAEIA tax credit?

The CDAEIA helps Québec companies accelerate digital transformation by integrating AI into e-business—automating processes, unlocking data insights, and launching smarter platforms—while reducing payroll costs via a partly refundable tax credit. It also fuels innovation and skills development, helping employers attract and retain scarce AI/IT talent and strengthen global competitiveness, especially for mid-sized tech companies.

Accelerate digital transformation through AI adoption

By supporting projects that integrate artificial intelligence into e-business, CDAEIA makes it easier for companies to automate processes, analyze large datasets, and deploy smarter digital platforms.

Support innovation in e-business and data-driven solutions

The credit encourages firms to develop and improve SaaS platforms, fintech tools, e-commerce engines, and other solutions that rely on cloud computing and machine learning.

Attract and retain scarce AI and IT talent

With salary credits covering a portion of eligible payroll, companies can offer competitive compensation packages and training, making Québec more attractive for top AI specialists.

Strengthen competitiveness in global markets

By reducing labor costs and enabling more ambitious projects, CDAEIA helps Québec tech companies scale faster, export more, and stay ahead of international competitors.

Reduce risk during the AI transition

Since CDAEIA includes a refundable tax credit, companies benefit even if they are not profitable yet, which is particularly valuable for startups and growth-stage scale-ups investing heavily in AI.

Companies eligible for the CDAEIA

To qualify for the CDAEIA tax credit, a company must have an establishment in Québec and operate in IT / e-business under recognized NAICS codes (e.g., 513211 software publishing, 513212 video-game publishing, 51821 data processing/hosting, 541514 IT systems design, 541515 video-game design; certain staffing codes 561320/561330 may count under certain conditions). In practice, a claimant must satisfy three core tests in the same fiscal year:

Activity mix tests

≥ 75% of gross revenue from IT-sector activities; and ≥ 50% from the specific NAICS set above (513211, 513212, 51821, 541514, 541515; 561320/561330 where conditions are met).

Services test (arm’s-length / outside-Québec use)

Of the revenue from those NAICS activities, ≥ 75% must be attributable to services ultimately delivered to non-related parties, or to applications used exclusively outside Québec (de minimis Québec use may be tolerated case-by-case).

Minimum staffing test

Maintain at all times ≥ 6 eligible full-time employees. An eligible employee works ≥ 26 hours/week, is hired for ≥ 40 weeks, and spends ≥ 75% of time directly on admissible e-business/AI activities.

Excluded entities include tax-exempt corporations, Crown corporations, and wholly-owned Crown subsidiaries.

Typical eligible sectors: software development, SaaS, fintech, healthtech/medtech, and e-commerce with AI-driven personalization.

For more information on defining and evidencing “significant” AI integration for CDAEIA, contact us.

Activities eligible for the CDAEIA

To be eligible under the CDAEIA, an application must automate and improve a company’s business processes by integrating artificial intelligence in a significant (not superficial) way.

Typical eligible activities

• Cloud/SaaS platforms that embed AI to drive workflows (routing, dynamic pricing, anomaly detection).
• AI-powered recommendation engines for e-commerce (personalization that lifts conversion and LTV).
• Machine-learning models for customer analytics (propensity, churn, CLV) used in production decisions.
• Cybersecurity with AI (threat scoring, intrusion/anomaly detection, automated response).
• NLP chatbots and assistants for service (intent detection, workflow automation, Retrieval-Augmented Generation or RAG).
• Computer vision for catalog integrity or quality control (classification, defect detection).
• MLOps and AI integration that productizes models (data pipelines, monitoring, CI/CD) when tied to a deliverable for a third party or a product to be sold.

Usually not eligible

Routine maintenance or evolution of existing software—such as patching vulnerabilities,
upgrading libraries, fixing bugs, minor performance tuning, or database re-indexing—even if AI tools are used. Under CDAEIA, maintenance, day-to-day operations, and first-level support
are excluded. Only significant AI integration that creates new capabilities tied to
a deliverable qualifies.

What types of AI activities are required for the CDAEIA?

CDAEIA focuses on significant, production-oriented AI that automates or materially improves
e-business processes. Typical eligible activities include:

• Predictive analytics for sales forecasting and inventory planning
• Recommendation engines that personalize SaaS or e-commerce experiences
• Fraud detection and risk scoring embedded in fintech workflows
• Computer vision for catalog quality enforcement or defect detection
• NLP chatbots and assistants with intent detection and workflow automation
• MLOps integration—data pipelines, model deployment, monitoring, and retraining—when tied to a deliverable or product

Reviewers from Investissement Québec look for strong evidence that AI materially changes capabilities and is supported by documentation of models, datasets, and impact. Routine maintenance, basic automation, or ops-only tasks generally do not qualify unless they produce new, demonstrably AI-enabled functionality.

There are many nuances—contact us for a free consultation.

Expenses eligible for the CDAEIA

Turn your AI payroll into cash. The CDAEIA is a tax credit that covers 30% of your eligible expenses, putting money back into the business while you build.

The only eligible expense is salaries for employees doing e-business or AI development.

CDAEIA tax credit rates

Nuances that change your cheque

• Year-based split: The 30% is not fully refundable; your fiscal-year start determines the split.
• 6-employee continuity: You must maintain at least 6 eligible employees at all times during the year.
• Rate-halving trap: If 50% or more of certain NAICS revenue comes from related parties for applications used exclusively outside Québec, the credit is cut in half.
• Stacking offsets: Grants, wage subsidies, and other government assistance reduce the claimable base. Shareholder-designated salaries are excluded.
• Salary distribution: Concentrating eligibility on fewer employees can yield a higher total credit.

Example (quick math)

• AI developer salary: $80,000
• Minus $18,952 exclusion threshold (basic personal amount for 2026)
• X 30% CDAEIA rate
• = $18,314 total credit, split into:
• $13,431 (22% refundable)
• $4,884 (8% non-refundable)

🔖 Bookmark this page and check back often—rates and rules evolve after each budget
and Investissement Québec update. To simulate your exact refund, contact us for a 30-minute review.

How can Emergex help

Navigating the CDAEIA tax credit can be challenging. Our team helps medium-sized tech companies:

• Assess eligibility for CDAEIA
• Identify qualifying e-business and AI activities
• Our PhD’s in AI can help guide you with a technological roadmap
• Prepare accurate claims with supporting documents
• Defend claims during verification by Investissement Québec
• Maximize tax savings while staying compliant

If you are a Quebec-based company moving from CDAE to CDAEIA, we can guide you through every step of this complex process.