Quebec AI Grants & Funding Programs

Quebec: Canada's AI Powerhouse

Montreal has emerged as one of the world's leading hubs for artificial intelligence research and commercialization. The city is home to Mila – Quebec AI Institute, the world's largest academic research centre in deep learning, founded by Turing Award laureate Yoshua Bengio. This concentration of talent has attracted major AI labs from Google, Meta, Microsoft, and Samsung, alongside a thriving ecosystem of homegrown AI startups.

Beyond Mila, Quebec's AI ecosystem includes CIFAR (the Canadian Institute for Advanced Research), which runs Canada's Pan-Canadian AI Strategy, the Scale AI supercluster headquartered in Montreal, and the legacy of pioneering companies like Element AI. The province produces more AI and deep learning research papers per capita than almost any other jurisdiction in the world, and its universities — Université de Montréal, McGill, Polytechnique Montréal, and ÉTS — graduate thousands of AI specialists each year.

For AI companies, this ecosystem translates into concrete financial advantages. Quebec's provincial government has built a layered incentive structure that, when combined with federal programs, makes it one of the most cost-effective places on Earth to build AI products and conduct AI research.

Quebec R&D Tax Credits

Quebec's provincial R&D tax credit is one of the most generous in Canada. Administered by Revenu Québec, the credit provides a 30% refundable tax credit on eligible R&D salary expenditures for qualifying small and medium-sized enterprises (SMBs). Larger corporations receive a 14% credit rate. The credit is fully refundable, meaning it is paid out as cash even when the company has no Quebec tax payable.

What makes this credit exceptionally powerful is its interaction with the federal SR&ED tax credit. A qualifying CCPC can claim the 35% federal enhanced SR&ED rate on the same R&D expenditures. When both credits are applied, the combined recovery rate on eligible R&D salaries ranges from 63% to 73%, depending on the specific structure and eligible amounts. This is among the highest combined R&D incentive rates available anywhere in the world.

Eligible expenditures include salaries paid to employees directly engaged in systematic investigation or experimental development. For AI companies, this covers machine learning engineers, data scientists, research scientists, software developers working on novel algorithms, and supporting technical staff. Contract R&D performed in Quebec also qualifies, though at reduced rates.

Scale AI Supercluster

Scale AI is one of Canada's five Innovation Superclusters, headquartered in Montreal with a mandate to build Canada's AI-powered supply chain ecosystem. With a combined public and private funding pool exceeding $230 million, Scale AI funds collaborative projects that apply artificial intelligence to supply chain challenges across industries including retail, manufacturing, transportation, and agriculture.

Scale AI projects are collaborative by design, typically requiring at least two partners (one industry player and one technology provider). For Quebec AI companies, this creates an opportunity to co-develop AI solutions with major industry partners while sharing the development costs. Scale AI covers a significant portion of eligible project costs, and the intellectual property generated remains with the participating companies.

The supercluster also invests in AI workforce development, training programs, and the adoption of AI tools by small and medium-sized businesses. Quebec companies looking to participate should monitor Scale AI's regular calls for proposals and consider building partnerships with potential collaborators in their target industries.

Canada Economic Development for Quebec Regions (CED)

CED is the federal regional development agency for Quebec, offering contributions and loans to Quebec businesses and organizations pursuing innovation, economic development, and community growth. For AI companies, CED's most relevant programs fall under the Regional Economic Growth through Innovation (REGI) stream, which funds technology commercialization, business scaling, and productivity-enhancing innovation projects.

CED contributions can be either repayable or non-repayable depending on the program stream and project type. Eligible costs typically include salaries, professional services, equipment, and other direct project expenditures. AI companies have used CED funding to support product commercialization, market expansion, hiring of specialized talent, and the development of AI-enabled solutions for specific industry verticals.

CED operates regional offices across Quebec and works closely with local economic development organizations. The application process is project-based, and CED advisors are available for pre-consultation to help companies determine the best program fit before submitting a formal application.

Investissement Québec Programs

Investissement Québec (IQ) is Quebec's provincial economic development agency, providing financial products and services to help businesses grow and innovate. For AI companies, IQ offers several relevant programs:

• Créativité Québec — Supports innovation projects including the development of new products, processes, and technologies. Provides loans and loan guarantees for projects that advance the technological capabilities of Quebec businesses. AI and machine learning projects are explicitly eligible.
• PME en Action — Designed for small and medium enterprises, this program provides financing for business growth, modernization, and technology adoption. AI companies can use this funding for scaling operations, acquiring equipment, or expanding into new markets.
• ESSOR — A program focused on business investment projects that create or maintain jobs. Provides loans and loan guarantees for projects involving equipment acquisition, facility expansion, and workforce development.
• Equity investments — IQ also makes direct equity investments in high-growth Quebec companies through its venture capital arm, providing growth capital alongside private investors.

IQ acts as a single window for accessing multiple Quebec government programs and can help companies structure financing packages that combine provincial and federal incentives. Their sector specialists understand the AI landscape and can guide companies toward the most appropriate programs.

PROMPT – Collaborative R&D

PROMPT (Partnership for Research on Microelectronics, Photonics, and Telecommunications) is a Quebec research consortium that funds collaborative R&D projects between industry and academia. While its historical focus has been on hardware and telecommunications, PROMPT increasingly supports AI-related projects, particularly those involving edge computing, AI hardware acceleration, computer vision, and telecommunications applications of machine learning.

PROMPT projects typically pair a company with a university research lab, sharing costs and intellectual property. For AI companies working on hardware-adjacent applications or those with strong academic collaboration potential, PROMPT provides both funding and access to specialized research infrastructure. Projects are reviewed through a competitive process, and PROMPT advisors can help structure proposals to maximize their competitiveness.

Quebec Funding Stacking Strategy

The real power of Quebec's innovation funding ecosystem lies in stacking multiple programs. Unlike many jurisdictions where programs are mutually exclusive, Quebec's incentive structure is designed to allow layering of provincial and federal programs. A strategic approach to stacking can recover 50–70% of total innovation spending.

To learn more about each of these programs individually, visit our detailed guides on SR&ED, NRC IRAP, and CDAP (closed). Our free assessment tool can help identify which combination of programs your Quebec AI company is eligible for.