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Quebec Announces Income Tax Reforms

by Mike Godfrey, Tax-news.com, Washington

29 March 2017


The Quebec Government has announced plans to increase the income tax-free threshold and retroactively reduce the health contribution for 2016.

The 2017-18 Budget included a proposal to increase the basic personal amount from CAD11,635 (USD8,708) to CAD14,890. Income above this threshold but below CAD42,390 will continue to be taxed at 16 percent. The Government said this measure will reduce the tax burden on individuals by more than CAD1.4bn over the next five years.

In October 2016, the Government announced that it would scrap the health contribution (which helped fund the public healthcare system) from January 1, 2017. Under Budget 2017, taxpayers earning less than CAD134,000 will pay no health contribution for 2016. Revenu Quebec will provide refunds when it processes 2016 income tax returns in the coming weeks.

The Government said that together these measures will reduce the tax burden on an individual living alone and earning CAD45,000 by CAD200 for 2016 and CAD255 for 2017. In the case of a couple with two work incomes of CAD45,000, the tax burden will fall by CAD400 for 2016 and CAD510 for 2017.

The Budget also contained the following tax-related measures:

  • A three-year extension of the tax holiday eligibility for large investment projects, to December 31, 2020;
  • A new additional capital cost allowance, which will apply to investments in manufacturing and processing equipment, and to investments in computer equipment; and
  • CAD31m in funding over the next five years to enhance the tax credit for Quebec film and television production and to support Tele-Quebec.

TAGS: individuals | tax | investment | public health | tax thresholds | manufacturing | Canada | tax reform | individual income tax

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