After significantly increasing aid to businesses since 2018, Quebec is cutting three tax credits, hoping to save $1 billion by 2029.
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Barely five years after putting it in place, the Legault government immediately abolished the tax credit aimed at encouraging the continued employment of workers aged 60 and over.
This measure allowed employers to receive up to $1,250 for a worker aged 60 to 64 and up to $1,875 for a worker aged 65 or over.
“We evaluated it and it is not performing well,” Finance Minister Eric Girard admitted on Tuesday. It is very little demanded by businesses, which do not need a tax incentive to hire people since there is a labor shortage.”
The abolition of this tax credit should generate savings of $251.9 million by the end of March 2029.
Video games and IT
Quebec also plans to raise nearly $875 million by making tax credits intended for the information technology (IT) and video games sector less generous.
By 2028, refundable tax assistance will increase from 24% (IT) and 30% (video games) to 20% of eligible expenses.
On the other hand, non-repayable aid will reach 10%, whereas it is currently only 6% (IT) and 0% (video games).
More profits in Quebec?
“These modifications will help maximize benefits by encouraging companies to market their intellectual properties from Quebec or to develop decision-making centers there. […]in order to generate more taxable income in Quebec,” we read in the budget.
Remember that to receive the non-refundable portion of the tax credits, businesses must declare profits in Quebec.
The CAQ also wishes to attract more high earners to Quebec by improving the tax credit applicable to them.
Finally, the government is improving certain elements of the tax credit for foreign filming and reducing others. That intended for Quebec film and television productions will be increased.