New measure to stimulate manufacturing investment

Summary of the measure

As part of the Québec Economic Plan 2016-2017, the government announced the introduction of a measure to foster investment in businesses in the manufacturing sector and the natural resource processing sector.

Under this measure, businesses billed at the large-power industrial rate (Rate L) that carry out one or more eligible investment projects may receive financial assistance from the government in the form of a reduction of the electricity costs of their establishments billed at Rate L.

This assistance could represent a reimbursement of up to 50% of eligible costs paid:

  • 40% of eligible costs paid;
  • an additional reimbursement of up to 10% of eligible costs applies to projects aimed at reducing greenhouse gas (GHG) emissions intensity.

An electricity bill may be reduced by a maximum of 20% for up to four years.

For example, a business whose annual electricity bill is $12 million and whose eligible costs total $5 million may receive financial assistance totalling $2 million, that is, a reimbursement of 40% of its eligible project costs. The assistance granted will correspond to a reduction of 16% of its electricity bill for a year.

Eligibility

To be eligible for the measure, investment projects must be carried out in Québec in businesses where at least one establishment is billed at Rate L. A business’s eligibility application may combine several investment projects.

  • Taken together, the investments specified in the application must reach the minimum investment threshold.

Businesses may submit their eligibility application from September 30, 2016 to December 31, 2018.

Minimum investment threshold

The minimum investment threshold for a business corresponds to the lesser of:

  • 40% of the annual electricity cost of all establishments billed at Rate L;
  • $40 million.

Eligibility certificate

To obtain an eligibility certificate, businesses must provide a detailed investment plan for each of their projects and demonstrate each project's:

  • technical and financial feasibility;
  • economic potential for improving productivity or increasing production;
  • potential for reducing GHG intensity, where applicable.

Investment Project Tracker and audit report

The discount is payable following the filing of an audit report no earlier than six months after the confirmation of a project's eligibility, or when the investments made reach 25% of eligible costs. Subsequently, an audit report must be submitted when investments totalling another 25% of eligible costs are made, or annually on the anniversary date of the discount.

  • For example, a business that received an eligibility certificate in respect of the electricity discount in January 2017 for eligible costs of $10 million may file an audit report when the investments made in its projects reach $2.5 million, or in July 2017.
  • Eligible costs for projects are sums commited after March 17, 2016 that give entitlement to capital cost allowance.

The Investment Project Tracker must be filed simultaneously with the audited report, which must be produced by an external accountant (the auditor).

  • The auditor must audit capitalized costs during the period covered by the Investment Project Tracker.

The audit process is at the business’s expense, and under its responsibility. The business must therefore assume the audit expenses and, in particular, must select an auditor.

In the case of applications for which investments are made in other currencies, the conversion to Canadian dollars must be presented in an appendix to the Investment Project Tracker.

Duration of the measure

The measure will apply from January 1, 2017 to December 31, 2024. The discount takes effect after the filing of the first audit report, and the reduction of the electricity bill may be applied for a maximum of four consecutive years.

Maximum reduction of an electricity bill

An electricity bill may be reduced by up to 20% for establishments billed at Rate L.

The eligible reimbursement amount is based on investments made. If the eligible reimbursement amount for a year exceeds the maximum reduction of 20% of electricity costs, the excess may be carried forward to subsequent years.

Parameters and terms of the measure

Application form

Download and complete the French official form:

To help you, an English courtesy version of the form is available:

Investment Project Tracker and audit report

For more information

For more information on an investment project’s eligibility for the electricity discount, please contact the entity named below:

Direction des sociétés d’État
Ministère des Finances
12, rue Saint-Louis, bureau 1.41

Québec (Québec)  G1R 5L3
Phone: 418 643-5704
Email : rabaiselectricite@finances.gouv.qc.ca