Finance Minister Eric Girard denies abandoning the aluminum sector, which does not have access to the new tax credit for major investment projects.
The Minister asserts that it would have been too complex to estimate the fiscal cost of the tax credit, if it had been offered to aluminum smelters. “It was impossible for the Department of Finance to properly quantify the cost of the tax holiday for major investment projects in the aluminum sector,” he explained during a presentation before the Chamber of Commerce of Montreal. metropolitan. So, if we are not able to calculate it, we exclude it. »
The fact that the electricity rates for aluminum smelters vary according to the price of aluminum would have complicated this estimate, according to him.
With aluminum, the problem is that electricity rates are a function of the price of aluminum. I am trying to calculate the cost of a tax holiday which is based on electricity rates, which itself is based on aluminum rates. It is very difficult to estimate.
Eric Girard, Minister of Finance of Quebec
The Ministry would not have had time to find an alternative solution to include the aluminum industry, specified the Minister during a press scrum on the sidelines of the conference. “A budget has a deadline. There are times when economic forecasts are closed. Then, we close the financial framework. Then we make the decisions. When we had to make this decision for the tax holiday for large investment projects, we were unable to properly quantify the number of projects that would be involved, their cost. »
The Legault government’s decision “disappointed” players in the aluminum industry. “Quebec is no longer alone in the forefront with its low carbon footprint aluminum, and we must ensure our future by remaining competitive,” reacted the President and CEO of the Aluminum Association of Canada. (AAFC), Jean Simard, earlier this week following the unveiling of the budget.
PHOTO EDOUARD PLANTE-FRÉCHETTE, THE PRESS
Finance Minister Eric Girard presented his 2023-2024 budget on Tuesday.
Mr. Girard denies abandoning this industry, a major employer in the Saguenay–Lac-Saint-Jean region. “As we love the aluminum sector and it is strategic, we put a footnote that says: “When we are better able to calculate it, most likely they will be eligible.” »
The minister acknowledged that the state has a role to play in supporting “strategic” sectors, such as aluminum, which are “capital intensive” but which have long-term benefits. In a scrum, he replied that he would “not judge” on the most appropriate intervention. “Each project is analyzed on a case-by-case basis. »
The tax credit for large investment projects is one of the flagship economic measures of the provincial budget, unveiled on Tuesday. The credit of 15% to 25%, depending on the region, is intended for investment projects of at least 100 million.
Other tax cuts
Mr. Girard also opened the door to other tax cuts on the sidelines of his speech, but these could not occur before achieving a balanced budget after payment to the Generations Fund, scheduled for financial year 2027-2028.
“Once that’s done, we’ll see where we are. […] Quebec remains the highest taxed place in North America, despite this tax cut. There would be other gestures that could be made, certainly. »
The promise to lower taxes is not unanimous and its detractors made several public appearances before the unveiling of the provincial budget.
For sometimes different reasons, economists, civil society groups and unions have asked the Legault government to abandon the election promise of the Coalition avenir Québec (CAQ). Some are pleading for additional investment in public services or the fight against climate change, others would like us to maintain payments to the Generations Fund to accelerate the reduction of the public debt.
During his speech to an audience made up of members of the Montreal business community, Mr. Girard defended the tax cuts adopted by his government, which would have the support of the “silent majority”.
“All the columnists are against me. Let’s be serious, the silent majority… I’m going to the public market. I am going to get coffee. Everyone congratulates me: “Thank you for the tax cut.” I open the newspaper. “Oh boy”, what a bad idea to lower taxes! »