Something promised, something due: the CAQ government is carrying out its election promise to lower personal taxes, and is adding other measures that will also have an impact on the wallets of Quebecers. Here is an anthology.
Tax reduction for all taxpayers
Quebec is reducing the personal income tax rates for the first two levels by one percentage point, respectively from 15% to 14% and from 20% to 19%. All Quebecers who pay income tax – that is 4.6 million taxpayers – will benefit from this measure, but to varying degrees.
For example, a single person living alone with an annual taxable income of $20,000 will benefit from savings of $8, or a tax reduction of 6.7%. If, on the other hand, she earns an income of $100,000, she will instead save $814, which is the equivalent of a tax cut of 5.4%.
Tax deductions at source will be adjusted as of July. Self-employed workers can apply the tax cut now. The remaining part of the promised tax cut will be granted in the spring of 2024, when the time comes to file your income tax return for the 2023 tax year.
The measure, which will cost $1.7 billion a year, will be financed through a reduction in payments to the Generations Fund.
Increase in a component of the solidarity tax credit
The government is also planning to improve the “housing” component of the refundable solidarity tax credit, another change that will come into effect next July.
Who will benefit? People eligible for the solidarity tax credit who do not live in subsidized housing.
From July, the additional amounts to which eligible persons will be entitled may reach:
- $78 for a person living alone,
- $94 for a childless couple or a single-parent family with one child,
- $126 for a couple with two children.
Changes to the Quebec Pension Plan
The government is also making changes to the Quebec Pension Plan (QPP), to which Quebec workers contribute in anticipation of retirement.
As anticipated, the government is not raising the minimum age of eligibility for the QPP from 60 to 62 – a controversial proposal.
On the other hand, the government is introducing several changes, the entry into force of which is scheduled for January 1, 2024:
- The maximum age for applying for a retirement pension will increase from 70 to 72 years.
- Contributions to the Québec Pension Plan will become optional from age 65.
- Pension protection for workers over 65 should be implemented after legislative and regulatory changes. In other words, if a person wishes to continue working part-time, and therefore at a lower income than during his career, he can do so without this affecting the calculation of his retirement pension.
Thanks to these new measures, Quebec aims to encourage workers aged 65 and over to stay in the labor market.
A more generous loans and bursaries program
The temporary increase in living expenses for the Loans and Bursaries Program, which expired this year, becomes permanent to help students cope with the rising cost of living.
The increase in living expenses considered in the calculation of student loans and bursaries amounts to $96 per month for students who live with their parents and $205 per month for students who do not live with their parents.
And what about the waiver of interest charges on student loans in Quebec? The Legault government has still not reached an agreement with the federal government. Result: this temporary measure that Ottawa has made permanent for the rest of students in Canada should end in Quebec on March 31.
Increase in tax on new tires
Currently, an “environmental duty” of $3 is applied by Quebec to the purchase of new tires. However, the cost currently associated with this eco-taxation measure is no longer sufficient to cover the current costs of collecting and processing used tires.
As of next July 1, the cost will increase to $4.50 for the purchase of new automobile tires, and to $6 for new truck tires.
Recall approximately when it was mentioned recently, and perhaps the reactions surrounding this initial proposal.