To the March 22 budget | Ideas for the Minister of Finance

The Quebec government received an unprecedented number of recommendations. In all, 317 briefs were submitted as part of the pre-budget consultations this year. The Press presents five ideas from this exercise.

Helene Baril
The Press

Stop subsidizing Google

The generous assistance of the Quebec government to the multimedia sector has given birth to a dynamic industry. It is time for this aid to be redirected to Quebec companies rather than benefiting foreign companies that pay their taxes elsewhere, suggests the Quebec chapter of the Canadian Council of Innovators, which brings together companies in the technology sector, including Coveo, LeddarTech and Lightspeed.

The goal of job creation can no longer justify the tax credit for the production of multimedia titles and the tax credit for e-business, argue these entrepreneurs. Talent is becoming increasingly scarce and tax credits, which are refundable, are no longer used to increase the workforce. They point out that between 2001 and 2016, the number of jobs in the IT sector increased by 12% while spending on tax credits jumped by 340%.

Their suggestion to the Minister: make these two tax credits non-refundable for foreign companies and improve them for companies established in Québec.

hostage cars

The garage on the corner is in danger and so is the freedom of a car owner to choose his garage, warns the Automobile Industry Association of Canada, which groups those who repair and maintain motor vehicles .

Cars are changing and becoming more and more like computers whose data is protected by the manufacturers, explain the mechanics in their memoir. Without access to this data, mechanics will no longer be able to repair and maintain them. This privileged information will be used by manufacturers to direct owners to original parts and dealers in their network, to the detriment of independent garages. The stakes are high for these companies, but also for motorists who could pay more for the repair and maintenance of their vehicles. In Quebec, $4.5 billion in expenditures and 91,000 jobs depend on it.

The mechanics are asking the government for regulations to oblige manufacturers to give free access to the computer data of motor vehicles to their owners so that the latter can themselves choose the establishment which will repair and maintain their cars.

Eat at public expense

Restaurants and bars are the businesses that have suffered the most over the past two years due to the pandemic. The Quebec Restoration Association, which has 5,000 members in all regions of the province, has begun counting the victims. It notes a reduction of 3,200 restaurant permits between February 2020 and January 2022. To get back on its feet, the restaurant sector wants help, in particular to create a 100% Quebec virtual marketplace that would be the equivalent of Uber Eats, SkipTheDishes and DoorDash.

Restaurant owners are also calling for the return of a measure that was highly contested at one time, namely the possibility for companies to deduct 100% of the cost of meals in restaurants with their customers. This is a measure that would also help city centers come back to life, plead the restaurateurs. This tax deduction has been reduced from 100% to 50% and the ARQ is calling for it to be restored to 100%.

In 2021, the 50% meal and entertainment deduction cost the government $76.4 million.

A debt plan

Reducing the debt is an objective that Québec has set itself for years so as not to make future generations bear the expenses of the past. It is for this purpose that the Generations Fund was created in 2006. Fueled by hydraulic and mining royalties, the fund will have accumulated $15.5 billion by March 31, 2022. The best way to reduce the accumulated debt is the subject of endless discussions and it is time to come up with a plan, suggest the Institut du Québec and the Association of Quebec economists.

They are asking the government to give itself the obligation to set a debt target to be reached. This target would seek to bring the debt down to the average of the other Canadian provinces, taking into account the cost of the debt and the state of public finances.

Economists from the IDQ and ASDQ suggest that once the objective has been reached, the Generations Fund be used to help future generations face environmental challenges, in particular by adapting public infrastructures to climate change.

Save public transit

Alliance Transit, a large coalition of organizations from all walks of life, is very concerned about the future of public transit in Quebec. Even if major projects like that of the REM make the headlines, the fact remains that public transit is very weakened by the pandemic, underlines the brief submitted to the Minister of Finance. Compared to Ontario, which plans to devote 74% of its transportation investments to public transit over the next 10 years, Quebec devotes only 31% of its transportation investments, the lion’s share still going to the road network.

Revenues from fuel taxes, which are the main source of funding for public transport, are no longer increasing. In fact, this source of financing has been on a downward trend since 2019, and with the popularity of electric cars, it could dry up, fears the group. Starting in 2035, the sale of new gas-powered cars will be prohibited in Quebec, so much so that it is urgent to find other solutions for financing public transit.

Transit is calling on the government to test, through a pilot project, the replacement of gas tax with per-kilometre charging with a view to replacing the gas tax within 5 to 10 years.