Review of tax expenditures initiated in the 2024 Budget has been
completed. Budget 2025 is announcing efforts to improve the tax system,
representing near $3 billion over 5 years. Results
of the review of tax expenditures in Budget 2025:
harmonizing the rate of tax on insurance premiums and that of the QST
refocusing on higher value-added IT activities with a tax credit for
the development of e-business integrating artificial intelligence (CDAE)
refocusing of the tax credit relating to resources on critical and
strategic minerals
increase the amount of the exclusion of the first dollars of eligible
work income from $5,000 to $7,500
Increase the maximum amount of eligible work income on which the tax
credit is calculated, from $11,000 to $12,500, and index this amount as
of the 2026 tax year
increase the amount of the reduction threshold from $40,925 to
$56,500, and index this amount as of the 2026 taxation year
increase the reduction rate from 5% to 7%
eliminate the grandfathering rule applicable to workers born before
January 1, 1951
see the information bulletin regarding changes related to the year of
death or the year of a bankruptcy.
The government plans to increase the housing component of the Solidarity
Tax Credit as of July 2023
changes to optimize the impacts of Quebec's tax-advantaged funds
Beginning in the 2024 taxation year, the tax credit for labour-sponsored
funds will be available only to taxpayers whose taxable income is equal to
or below the threshold of the top tax bracket ($119,910 for 2023).
2022-2023 projected deficit $3 billion, followed by $35 million for
20223-2024, and increased surpluses in subsequent years
no personal or corporate income tax changes
one-time cost of living support payment of $500 will be made to
adults with an income of $100,000, reduced at a rate of 10% for every dollar
of personal net income exceeding $100,000, reducing to zero at net income of
$105,000. Eligibility requirements as of December 31, 2021:
18 years of age or older
residing in Quebec
based on information provided in the 2021 tax return - payment will be
made as soon as the tax return is processed by Revenu Quebec.
There may be a delay for those returns processed before March 22nd,
while the returns are reprocessed.
Quebec Fall Economic and Financial Update
- Nov 25, 2021
Exceptional cost of living allowance for low- and middle-income earners,
who will receive $400 per couple or $275 for a person living alone, in early
2022. This is a one-time payment.
Extension for 2 years the temporary enhancement to student financial
assistance announced in July 2021.
See 2021
Budget Additional Information (pdf) for Fiscal Measures - it is much
better to download the pdf and open in a pdf reader, so that the bookmarks
can all be viewed.
Projected budget deficits:
$15 billion in 2020-2021
$12.3 billion in 2021-2022
Proposed Personal Tax Measures
See 2021 Budget Additional Information page A.31 (pg 35 of the pdf).
Enhancement/revision of the refundable tax credit for home-support
services for seniors, for 2022 and subsequent taxation years:
The rate will be increased by 1% each year starting in 2022. It is
currently 35%, and will reach 40% in 2026.
A reduction mechanism will be introduced applicable to dependent
seniors, based on family income above the reduction threshold.
The reduction mechanism for non-dependent seniors will be revised to
better reflect family income.
increase in eligible expenses for seniors living in a rental apartment
building.
Dividend
tax credit for non-eligible dividends will be reduced from 4.01% to
3.42% of the grossed-up (taxable) dividend, for dividends received or deemed
received after December 31, 2021. This corresponds to the increase in
the small business deduction (SBD).
Proposed Business Tax Measures
See 2021 Budget Additional Information page A.9 (pg 13 of the pdf).
small business corporate income tax rate reduced from 4% to 3.2% for
corporation tax years ending after March 25, 2021.
instalment payments may be adjusted, as applicable, as of the first
instalment following the day of the budget speech.
temporary increase in the tax credit rates for investment and innovation,
and other amendments. The rates are doubled for Mar 26, 2021 to Dec
31, 2022.
temporary increase in the refundable tax credit rate for on-the-job
training periods, for Mar 26, 2021 to Apr 30, 2022.
elimination of requirement to obtain advance ruling for R&D tax
credits
addition of restrictions to certain tax incentives
Proposed Quebec Sales Tax Measures
See 2021 Budget Additional Information page A.3 (pg 7 of the pdf).
Clarifications regarding Quebec's general intentions to harmonize the QST
system with the federal GST/HST proposals related to electronic commerce
supplies.
Other Measures
See 2021 Budget Additional Information page A.39 (pg 43 of the pdf).
modifications to tax advantaged funds
maintenance of the compensation tax for financial institutions
amendments to the mining tax act
measures concerning trusts
autonomous application of the penalty for promoters of aggressive tax
planning
There is of course much more to the Quebec Budget than the tax
measures. For the complete budget see Quebec
2021-2022 Budget Index.
The economic update details the reduction of $8.8 billion to
Quebec's revenue due to the economic contraction, and provides information
on fiscal measures taken re COVID-19.
Tax measures:
deadlines extended for filing personal income tax returns and
paying income tax balances and contributions.
doubling the new refundable tax credit for caregivers for 2020,
and making it available to caregivers of spouses of any age and caregivers
having no family relationship with the care receiver.
implementing a single school tax rate based on the lowest
effective rate in Quebec, ahead of schedule.
deferral and reduction of tax levies on businesses, and
accelerated payment of tax credits to businesses.
See 2020
Budget Additional Information (pdf) for Fiscal Measures. The
refundable tax credit for caregivers will be enhanced and made more
accessible. There are many measures concerning businesses, but no
change in personal or corporate income tax rates or dividend tax credit rates.
Amend tax legislation to enable Revenu Quebec to
pay the QST component of the solidarity tax credit to social assistance
recipients without them having to file a tax return.
Public prescription drug insurance plan exemptions
adjusted for 2019.
Amendments re deferral of payment of tax on deemed
disposition of interests in a qualified public corporation.
Introduction of a refundable tax credit for SMBs
to encourage them to hire or retain workers aged 60+, with maximum credit
of $1,250 to $1,875 annually per employee, depending on age.
Eligible expenses for refundable tax credit for
reporting of tips to include provisions re days of leave for family
obligations or health reasons
Government will make it mandatory for individuals
who operate a digital accommodation platform to register for the tax on
lodging, collect the tax and remit it to Revenu Quebec, the same as
operators of sleeping-accommodation establishments located in Quebec
tourism regions where the tax applies.
Revenu Quebec will establish, in cooperation with
the financial market sector, a new tax slip that will make it easier to
report financial market transactions to investors.