QUEBEC BUDGET 2023-2024
PRESS RELEASE
For immediate release
QUEBEC BUDGET 2023-2024
Individuals are winners, businesses are still waiting.
Quebec City, March 21, 2023 – Although it applauds the reduction in the personal tax burden, La Fédération des chambres de commerce du Québec (FCCQ) and the West Island of Montreal Chamber of Commerce (WIMCC) are disappointed to see that to meet this objective, the Québec Government has chosen will suspend contributions to the “Fonds des générations” to finance a tax reduction solely for the benefit of individual taxpayers. Although there is an emphasis on tax relief for large investment projects, the expectation is that the government grant similar treatment to Quebec businesses.
The CCOIM also welcomes the tax measures regarding the Quebec Pension Plan (QPP), which corresponded to pre-budget expectations that the FCCQ had expressed; to encourage experienced workers to remain in the labor market, not to mention the earmarked amounts provided to improve the integration of newcomers. Certain measures in regional development will also meet expectations as expressed by the FCCQ, such as support for tourism, cellular telephone technology and educational childcare services.
Resist the temptation to use the “Fonds de génération” to finance election commitments
“In terms of tax reduction, we agree with the end-goal, but not with the method chosen by the government. This type of announcement unfortunately opens the door to funding strategies to the detriment of sound public finances for future generations,” lamented Charles Milliard, President and Director General at the FCCQ.
“This time around the tax breaks were aimed at individuals, but in the next budget, businesses, specifically SME’s should also benefit from similar tax relief. They have also suffered the consequences caused by inflation in recent months, particularly affecting their operating, transportation, and supply costs. Remember, as well, that the government recently chose not to include SME’s in the plan to limit price increases in electricity to 3% rather than 6.4%, as they did for individuals,” continued Charles Milliard.
The FCCQ and the WIMCC point out that the significant increase in inflation has negatively impacted the economy but by the same token, inflation has also increased government revenues, compared to what had been anticipated in the last budget. This availability of additional funds could have served the government in financing its electoral commitments.
Experienced workers and new arrivals: solutions to address labour shortages
The FCCQ is pleased that the government has granted the possibility of ceasing QPP contributions for eligible workers of 65 years old or older and of ending the obligation to contribute to the QPP for workers 72 years or older.
“This is an important recommendation we presented during the pre-budget consulting process with the Government, namely, to make QPP contributions optional for workers aged 65 and over. All generations of workers are an asset for employers, in the context of labour shortages. The same goes for new arrivals, who thanks to good integration who contribute to stem the shortage in labour. We are also committed to contributing to the effort through our ‘Vision et inclusion’ program, unveiled last month,” added Charles Milliard.
However, the FCCQ and the CCOIM remain focused on championing measures that support small and medium-sized businesses. One of the issues that they face with respect to business transfers, is to help create the right conditions to facilitate these transactions. One such measure to encourage business transfers would be to relax the tax rules to allow transferors of their businesses to carry out a gradual transfer of control, rather than requiring a transfer of 50 % + 1, which is a major hurdle regarding these types of transactions. Unfortunately, this measure was not included in the 2023-2024 Quebec budget.
Tax relief for large investment projects could be leverage development
A new tax savings measure specifically aimed at large investment projects will replace a previous similar measure, which will target an increased number of sectors of activity, that will include approximately 100 new investment projects of at least $100 million, up to 25% eligible investments, by reducing the maximum tax benefit window which will now be set at 10 years. This tax measure will allow a business to save on income tax as well as on employer contributions to the “Fonds des services de santé”.
“This is an interesting measure that could leverage new development in terms of attracting private investment. This measure must be properly promoted and used as a tool to attract the estimated 100 new projects to Québec, including the West Island of Montreal, on the international stage. The Government has a responsibility to ensure that regional development opportunities are properly highlighted and that local chambers of commerce are viewed as well-positioned to provide relevant information regarding these investment projects as well as the related tax incentive measures in question” said Joseph Huza, President and Executive Director of the CCOIM.
Regional development: Additional measures would have been necessary
The FCCQ notes that significant sums are planned for regional development, among other things to support the development of educational childcare services, in addition to the biofood, forestry and tourism and cultural sectors. It should be ensured that the support for tourism industry be fairly distributed throughout the province, in addition to Montréal, Québec and Gatineau.
Regarding the measures presented to respond to the housing shortage, the government is now setting aside $650 million over six years to build 1,500 new affordable housing units, including 500 units in collaboration with the private sector, bringing the number of new housing units announced to 5,250 housing units since 2019-2020.
“The need for the construction of new rental housing is very high and is a crucial tool in the recruitment and retention of employees which is an issue that affects many companies in all regions of Québec, including the West Island of Montreal. Without this measure in place, companies would not be able to contribute to their regional economic vitality. The same can be said of other services such as the lack of places in educational childcare services or the public infrastructure necessary for the development of a community,” mentioned Joseph Huza, President and Executive Director of the WIMCC.
“We will remain vigilant to ensure that the amounts announced by the Finance Minister, Éric Girard, will be sufficient to meet the needs of the province including the West Island of Montreal” concluded Joseph Huza, President and Executive Director of the CCOIM.
About la Fédération des chambres de commerce du Québec (FCCQ)
Thanks to its vast network of 123 chambers of commerce and 1,200 corporate members, the Fédération des chambres de commerce du Québec (FCCQ) represents more than 45,000 businesses operating in all sectors of the economy and throughout Quebec. The largest network of business people and companies in Quebec, the FCCQ is both a federation of chambers of commerce and a provincial chamber of commerce. Its members, whether chambers or companies, all pursue the same goal: to foster an innovative and competitive business environment.
About the WIMCC
Supported by a strong and diverse representation from the business community, the WIMCC has the support of over 700 members as the voice of the West Island business community. Since its creation in 1978, the mission of the WIMCC has been to encourage and promote the development of the business community. For more information on the WIMCC and its events, visit www.ccoim.ca.
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Media Contacts :
Javier Garcia
Press Attaché
Fédération des chambres de commerce du Québec (FCCQ)
C: 438 408-3731
Joseph Huza
President and Executive Director
The West Island of Montreal Chamber of Commerce (WIMCC)
C: 514-776-5720