The 2020-2021 budget tabled by the Minister of Finance follows in the path of his previous one, notably with regard to significant budgetary surpluses. A favourable situation that, according to Mr. Girard, gives the Province some leeway to support the economy should it be affected by the current global situation.
In addition to the issue of the budgetary balance, this budget contains a number of measures aimed at individuals and entrepreneurs. Here are the most noteworthy.
- As in the first Girard budget, there are no income or consumer tax reductions this year. On the other hand, the government confirms its intention to standardize school tax rates, which could provide new savings for some taxpayers starting in July. For example, according to the government’s figures, the owner of a home in Montreal worth $275,000 would save $182 compared to 2018. For the same home located in Mauricie or Saguenay–Lac-Saint-Jean, the school tax reduction would be $509.
- As well, people who are caregivers will want to note the introduction of the refundable tax credit for caregivers, which replaces the “refundable tax credit for informal caregivers of persons of full age.” The new program has two components and can provide up to $2,500 per year in support.
- The same goes for the parents of severely handicapped children. The budget provides for additional support amounting to $150 million over five years. Another measure that could make a difference: a parent can take a career break of 18 years to care for an eligible handicapped child, and this period will be excluded when determining the pension payable under the Quebec Pension Plan. Previously, the maximum exclusion period was seven years.
- In a similar vein, the government also wants to use a reduction in payroll taxes to encourage businesses to hire people with a severely limited capacity for employment. To achieve this, the budget provides for tax relief of close to $14 million over the next five years.
- With regard to more general economic measures, the Quebec Infrastructure Plan totalling $130 billion over 10 years (an increase of $1.5 billion per year compared to the last budget) is one of the most noteworthy expenditures in this budget. If your company is active in public infrastructure construction or renovation, this news will probably interest you.
- The budget also includes spending in the area of climate change, particularly with respect to the electrification of transportation. At the individual level, provisions notably include the continuation of the Roulez vert program, which provides financial assistance of up to $8,000 on the purchase of an electric vehicle. The Chauffez vert program aimed at residential heating will also continue.
- If you are an entrepreneur, you will no doubt want to familiarize yourself with several measures aimed at supporting your investments. The first is the introduction of the investment and innovation tax credit, known as “C3i.” This credit will apply to acquisitions of manufacturing and processing equipment, computer hardware, and management software packages, and the benefit can be as high as 20% of eligible investments. Note that the tax credit rate will vary depending on the region where the investments are made, and that the tax credit for the integration of IT in SMBs will be abolished at the same time.
- Another new measure for innovative companies: the incentive deduction for the commercialization of innovations (IDCI). If you own the intellectual property and incurred R&D expenses in Quebec for an asset you commercialize in the province – software, for example –, the revenue generated could now be taxed at an effective rate of 2.0%. That’s a 9.5% reduction compared to the general rate.
- If you are looking for investors to support the growth of your SMB and your business is in an innovative sector such as green tech, life sciences or artificial intelligence, the new synergy capital tax credit could foster ties between your company and firms wishing to invest in it.
- If you are an entrepreneur in the cultural sector, especially music, you will probably want to learn more about the new and improved measures announced in the budget, which provides close to $457 million in additional investment over six years.
- Finally, is your company active in the maritime transport industry? The budget announces a new iteration of the government’s Maritime Strategy, with a budget of $300 million. Of course, this is only a brief overview.
For more information, feel free to read the documentation published by the Ministère de Finances! You will find it here.