The Quebec Minister of Finance tabled his budget for 2015-2016 in the National Assembly on the 26th of March, 2015. Here are the highlights:
- Quebec will finally have a balanced budget again: in the current year.
- The Ministry of Health and Social Services will continue to be the main area for spending, with a 49.4% allocation.
- This balanced budget is supported financially by an increase of only 1.5% in spending and an anticipated increase of 4.4% in revenue.
- Establishment of a $3.4 billion economic development plan (including $2.5 billion in tax breaks) for the next 5 years:
- Gradual elimination of the health tax contribution by 2020.
- Introduction of measures between now and 2017 to prevent workers from being penalized for receiving wage increases.
- Reduction of the corporate tax burden by $215 million as of 2020.
- Reduction of employer contributions to the Health Services Fund (FSS) from 2.7% to 2.25% as of January 1, 2017.
- Reduction of the general corporate tax rate from 11.9% to 11.5% – the same rate as in Ontario – as of January 1, 2017.
- Occupational Health and Safety Commission (CSST) will be consolidated with the Labour Standards Commission (CNT) and the Pay Equity Commission.
- Raising of the minimum payroll requirement for employee training under the Workforce Skills Development and Recognition Act (the so-called “1% law”) from $1 million to $2 million.
- Budget cuts on the order of $30 million to the Ministry of Agriculture, Fisheries and Food (MAPAQ), primarily to La Financière agricole.
- Budget cuts on the order of $5 million to the Ministry of Sustainable Development, Environment and the Fight against Climate Change (MDDELCC).
- Additional cuts to the budgets of the Consumer Protection Office and the Office de la langue française.
More flexibility for the Régie des Alcools des Courses et des Jeux (RACJ) in applying suspension measures to licenced establishments.
Quebec Sales Tax
The government also promises to consider what action to take in response to the report of the Quebec Taxation Review Commission. The government confirms that an increase to the Quebec Sales Tax (QST) is being considered.
Readers may note that sales taxes of various sorts will bring in over $18 billion for the Quebec Government in 2015-2016.
At the Quebec budget hearings, as you may recall, the RCC asked the government not to impose any new taxes on products and to start thinking instead about e-commerce as a source of tax revenue. The government has accepted this suggestion.
The RCC today published a news release acknowledging the effort the government is making not to raise taxes on consumption before considering this issue in greater depth.
The RCC will ask the government to share its future ideas on taxation in Quebec in response to the recent report of the Quebec Taxation Review Commission. The RCC will use its expertise to help strike a workable balance between sales tax and income tax revenues, without reducing the competitive edge of Quebec retailers against their competitors in Canada and other countries.
If you have any questions, please feel free to call Jean-Guy Côté, director of government relations and public affairs, at 514-982-0267, extension 332, or email [email protected].