Published | Category : Income tax - businesses

Extension of and Changes to the Tax Credit for the Production of Biodiesel Fuel in Québec

The refundable tax credit for the production of biodiesel fuel in Québec has been extended for five years. The tax credit is now calculated using a fixed rate, and the monthly ceiling on the production of biodiesel fuel has been increased.

Extension of the eligibility period

Tax legislation will be amended so that the eligibility period for the refundable tax credit for biodiesel fuel production in Québec ends on March 31, 2023.

To be included in the eligible production of biodiesel fuel of a qualified corporation for a particular month, biodiesel fuel must be produced after March 31, 2017, and before April 1, 2023, and the purchaser must take possession of it in the particular month, before April 1, 2023.

Change to the calculation of the refundable tax credit

Tax legislation will also be amended to provide that the refundable tax credit for the production of biodiesel fuel in Québec will be calculated at a fixed rate of $0.14 per litre as of April 1, 2018.

If a qualified corporation's taxation year includes March 31, 2018, the refundable tax credit is calculated in two ways:

  • For eligible production of biodiesel fuel for each of the months in the part of the taxation year that precedes April 1, 2018, the variable rate for each of these months applies, taking into account the average monthly price of crude oil.
  • For eligible production of biodiesel fuel for each of the months in the part of the taxation year that follows March 31, 2018, a fixed rate of $0.14 per litre applies.

Change to the monthly ceiling on the production of biodiesel fuel

The monthly ceiling on the production of biodiesel fuel for a qualified corporation increased on April 1, 2018, so that, for a particular month beginning after March 31, 2018, it is calculated by multiplying 821,917 litres by the number of days in the particular month.

If a qualified corporation's taxation year includes March 31, 2018, the corporation's monthly ceiling on the production of biodiesel fuel for each of the months in the part of the taxation year that precedes April 1, 2018, is calculated by multiplying 345,205 litres by the number of days in the month. Its monthly ceiling on the production of biodiesel fuel for each of the months in the part of the taxation year that follows March 31, 2018, is calculated by multiplying 821,917 litres by the number of days in the month.

For more information, see pages A.98 to A.100 of Additional Information 2018-2019 (PDF – 3.73 MB) published by the Ministère des Finances.

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