The economic background is changing by the minute during the COVID-19 pandemic. We can't ignore it nor pretend we aren’t affected by it. Some businesses are facing grave consequences, especially those that cannot afford to work remotely. Small and medium enterprises (SMEs) are particularly at risk as they face major financial challenges ahead. The COVID-19 virus has done much more than shifting millions into imminent quarantine.
According to Forbes, it has also accelerated our digital transformation and is pushing for the adoption of Industry 4.0 faster than ever before. We believe that technology is the key to remaining relevant while adapting to new realities caused by crises like this one.
As we’re based in Quebec, we’re particularly invested in the economic success of our native province. We’re very glad to see that the Quebec Government acknowledged the strain of adopting new technologies and is promoting faster and cleaner economic growth with its introduction of the Investment and Innovation Tax Credit (C3i).
Quebec’s Position in This Technological Revolution
The Government of Quebec set ambitious goals back in 2017 when it embarked on the journey to foster innovation and promote talent and skills.
The Québec Research and Innovation Strategy (QRIS) initiative is a 6-year plan that highlights 3 main goals:
- Support the necessary pillars to cultivate skills and talent;
- Ensure that innovation is nurtured and promoted within organizations;
- Encourage modernization by helping businesses invest in and commercialize it.
Along with these objectives, Quebec is also pushing to position itself “among the top 10 research and innovation leaders in the Organisation for Economic Co-operation and Development (OECD)”, by 2022.
By 2030, their goal is to ensure that Quebec is known around the world as one of the most progressive societies.
While these programs have the businesses’ best interests at heart, the province has also implemented the 2018-2023 Cleantech Action Plan for Growth that will help the socioeconomic objectives coexist with the propagation of a cleaner environment.
One of the Cleantech Action Plan’s resolutions is to have more companies “implement eco-responsible business practices, including the adoption of clean technologies.” Keep this in mind as we further discuss the government’s initiatives.
Government’s Initiative to Spark Innovation
This action can only mean that the government acknowledged that the digital revolution or Industry 4.0, is here and changing the business, social and economic spheres in a heartbeat.
Statistics Canada repeatedly conducted the Survey of Innovation and Business Strategy from 2015-2017 to find a boost of 15.8% in the number of innovative enterprises. They attributed this growth to the availability and greater affordability of technological solutions.
These solutions enumerate the ability to capture, manipulate and receive the essential information to make decisions at the right moment for your business. It thoroughly encompasses the Fourth Industrial Revolution definition. We are living to see that those businesses that adopt these systems will persevere and pave the way for new standards in operations and management.
But what does all this mean for Quebec small and medium enterprises (SMEs)?
The Investment and Innovation Tax Credit (C3i) Details
It is important to note that the investment and innovation tax credit can be used by all SMEs no matter the business sphere activity and only on those expenses incurred before January 1st 2025. The investment tax credit eligible expenses are considered to be manufacturing and processing equipment, computer hardware and management software packages.
-There is a maximum limit of $100 million for eligible expenses;
- C3i is fully refundable for SMEs;
- If you were applying for the tax credit for investments, C3i will replace it unless you specifically choose otherwise;
- The tax credit rate will climb to 20% from the previous 10% and will be calculated conform an economic vitality index of the investments made;
- In the case of a manufacturing and processing equipment purchase, the eligible expenses for claiming the tax credit will be those exceeding $12,500;
- For the investments to purchase any computer hardware and management software packages, the acceptable portion limit will be set at $5,000 .
Why Would You Want to Invest in an Innovative Product, Anyways?
Without sounding too cliché, this is the future. Or shall we say, the present. As Forbes demonstrated in its, “100 Stats on Digital Transformation and Customer Experience,” apart from boosting a company’s economic profits by as much as 20-50%, implementing digital technologies can also lead up to higher customer satisfaction with a 20-30% increase.
We know firsthand how dramatic the improvements can be, from added quality consistency or decreased error rates that can give you an edge over the competition.
Still not convinced? Take note that already a heaping 70% of businesses have turned their attention to digitalization and implemented the necessary steps to benefit from Industry 4.0. Additionally, the governments, such as the federal government and the Quebec provincial one have pledged to introduce new regulations and standards to spark innovation among SMEs. Now is the time to do an internal audit and see how the innovation tax credit can help you achieve similar results.
Read how - Gerber Gear is able to overcome production quality challenges with the help of VKS.
As our software is designed as a digitally innovative solution to improve productivity on the shop floor and increase efficiency for manufacturers, it can do so much more for your company.
Going back to the Cleantech Action Plan, VKS’s digital solution of going paperless aligns with the plan’s mandate to minimize the environmental footprint of economic development. You can also benefit from shorter employees’ training time, detailed live reports and a 100% traceability for your parts and processes.
Book a demo today to get a full analysis of your current work process.
- Adopting innovation through digital solutions will deliver real tangible results for your business (more than 30% increase in customer satisfaction, time to market and operational efficiency).
- The Quebec government is offering you an investment and innovation tax credit to alleviate the costs of adopting innovative solutions.
- The COVID-19 crisis is pushing businesses to reinvent themselves in short periods of time.
- You will be able to make more informed strategic decisions that will help you gain a competitive advantage in the future.