Hiring skilled staff to develop and launch new products can be costly for export-focused businesses in Prince Edward Island. The Innovation and Development Labour Rebate Program (PEI) helps offset these expenses by offering a rebate of up to 25% of eligible labour costs for innovation projects. This program is managed by Innovation PEI and supports qualifying businesses in key sectors.
The Innovation and Development Labour Rebate Program is a provincial tax credit designed to help PEI businesses that are creating new or improved products, processes, or services for export. The rebate lowers the cost of hiring staff for innovation and development projects, making it easier for companies to invest in growth.
To qualify for the rebate, your business must meet all of the following requirements:
Labour expenses that typically qualify include:
General overhead, administrative time, and unrelated wages are not eligible.
Applying for the Innovation and Development Labour Rebate Program requires careful planning. Only approved projects and properly tracked labour costs are eligible.
Confirm your project’s eligibility
Ensure your project is focused on innovation, development, or commercialization for export.
Prepare project documentation
Gather information on:
Track eligible labour costs
Maintain payroll records showing:
Submit your application to Innovation PEI
Use the Government of PEI’s online service portal to apply.
Claim your rebate
After approval and verification of labour costs, the rebate is applied as a tax credit.
If you aren’t sure whether your business or project qualifies, tools like GrantHub’s eligibility matcher can help you check your fit with this and other PEI programs.
Including non-project wages
Only labour directly tied to the approved innovation project is eligible. Administrative or sales wages do not count.
Weak export plans
The program is meant for export-focused businesses. If your export plan is vague or only targets local markets, your application may be rejected.
Lack of sector alignment or justification
If your sector is not listed, you must clearly explain why your product is first-of-its-kind and exportable.
Poor record-keeping
Missing payroll information or unclear tracking can delay or reduce your rebate.
Q: Is the Innovation and Development Labour Rebate refundable?
The program is a tax credit. Whether it is refundable or can only be used against taxes owed depends on your business’s tax situation and Innovation PEI’s rules.
Q: Can this rebate be combined with SR&ED or other grants?
Often, yes. Many businesses combine this rebate with federal programs like SR&ED, as long as total government support does not exceed program limits.
Q: Are creative and cultural industries eligible?
Yes. Creative and cultural industries are among the eligible sectors for this program.
Q: Do startups qualify for the labour rebate?
Startups may be eligible if they are registered in PEI, have an export focus, and are working on an innovation or development project.
Q: Is there a deadline to apply?
The program is open, but funding and intake rules can change. Always check with Innovation PEI for the latest timelines before starting your project.
GrantHub tracks hundreds of grant and rebate programs across Canada—including provincial tax credits—so you can easily find those that match your business needs.
If your business is developing new products or services for export, the Innovation and Development Labour Rebate Program (PEI) can reduce payroll expenses related to innovation. Confirm eligibility early and keep thorough records of labour costs. GrantHub can help you identify this rebate and other PEI funding options, so you can plan your projects with confidence.
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