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Quebec 2016 Budget

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Quebec -> QC Budgets -> 2016 Budget

Quebec Budget - March 17, 2016

Full details of the budget can be found on the Finance Quebec website.  All proposed changes are subject to legislative approval.

Personal Tax Changes

bulletHealth contribution - reduced further for 2016 and 2017, completely eliminated for 2018.
bulletThe refundable tax credit respecting the work premium will be increased for households whose capacity for employment is severely limited.  These households receive the adapted work premium.
bulletThe tax shield refundable tax credit that was introduced as of tax year 2016 by the QC 2015 Budget will be enhanced by raising the maximum increase in eligible work income relative to the previous year to $3,000 from $2,500 for each member of a household. Details of the calculation of this tax credit can be found on page A.13 of the Additional Information on Fiscal Measures from the QC 2015 Budget.
bulletTax credit for experienced workers will be further enhanced, by lowering the age of eligibility to 62 beginning in 2018, with a $4,000 threshold for that age.
bulletThe tax credit for charitable gifts/donations is currently limited, in that the tax credit is calculated on a maximum amount of 75% of the donor's income for the year in which the tax credit is claimed, with certain exceptions.  This limitation will be removed for the 2016 taxation year.  The removal of the limitation does not appear to apply to corporations, just to individuals.
bulletFor 2017 and later years, a higher rate of 25.75% will apply for donations over $200, to the extent that an individual has taxable income that will be taxed at 25.75%.
bulletIntroduction of the RenoVert tax credit: a temporary refundable tax credit for eco-friendly renovations

Business Income Tax Changes

All page # references below are to the 2016-2017 Budget Plan - Additional Information on Fiscal Measures (pdf).

bulletReduction of the Health Services Fund contribution rate for all small and medium-sized businesses (SMBs), as of 2017.  See pages A.29 to A.34.
bulletSmall Business Deduction (SBD) - the qualification criterion re the minimum number of employees will be replaced by a qualification criterion concerning the minimum number of hours worked during the taxation year.  See page A.35 to A.36.  Changes will apply to a taxation year beginning after December 31, 2016.
bulletFor Manufacturing SMBs (small and medium businesses), a corporation may claim an SBD at the highest SBD rate obtained, using either the qualification criterion concerning the minimum number of hours worked or the qualification criterion based on its level of activity in the primary or manufacturing sector.  Labour cost will be the item considered in determining the proportion of a corporation's activities attributable to the primary sector or the manufacturing and processing sector.  This is effective for taxation years beginning after December 31, 2016.  See Page A.37.
bulletTax provisions applicable to the transfer of family businesses will be eased - see pages A.38 to A.44.
bulletImplementation of an income-averaging mechanism for forest producers - see pages A.44 to A.49.
bulletIntroduction of a deduction in calculating (DIC) the taxable income of a qualifying innovative manufacturing corporations, for 2017 and later years. See pages A.49 to A.53.
bulletSeveral other changes regarding businesses - see pages A.53 to A.74.

More detailed information on taxation changes can be found in the 2016-2017 Budget Plan - Additional Information on Fiscal Measures (pdf).

Quebec Harmonization With Federal 2016 Budget

On May 6, 2016, Revenue Quebec published Information Bulletin 2016-5 regarding harmonization with various measures announced in the 2016 federal budget.

Revised: March 29, 2017

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