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Government announcement
January 12, 2018

Measures to increase Quebecers’ disposable income have been in effect since January 1


QUÉBEC CITY, Jan. 12, 2018 – Several tax measures designed to increase individuals’ disposable income, which were announced in previous budgets and in the latest economic update, took effect on January 1, 2018. This is the case for the $100 supplement per school-aged child, which will allow 700,000 families to benefit from additional support for costs related to purchasing school supplies. Thus, taking into consideration the tax reductions that have been announced, a family with two school-aged children and an income of $44,050 for each parent will see its annual tax load reduced by $1,200 as of 2017.

The government is also enhancing work premiums for childless households. Moreover, the eligibility requirements for the supplement to the work premium for long-time recipients who go off last-resort financial assistance will be expanded. Over time, these measures will represent an improvement of nearly $80 million.

Our government wants to simplify Quebecers’ lives, especially when it comes to income tax returns. Therefore, starting in 2018, the work premium and the tax shield will be automatically granted to those who produce their income tax returns and are eligible, without their having to apply for them.

Other previously-announced measures that will be paid out in 2018

Several measures that apply to 2017 income tax returns have already been announced and will be paid out in 2018.

  • Taxpayers will benefit from a tax reduction of up to $333 thanks to the increase of the basic personal amount announced in the March 2017 budget and the reduction of the lowest tax rate from 16% to 15%, which was announced in last November’s update.
  • The health contribution will be completely eliminated for all taxpayers as of 2017.
  • Residents of the Magdalen Islands will benefit from the full amount of the deduction for residents of remote areas.
  • The QST component of the solidarity tax credit will be paid out automatically to those who produce their 2017 income tax return and are eligible.
  • The tax credit for donations will increase for individuals whose marginal tax rate is higher than 24% as of 2017.

Enhancement of the work incentive for experienced workers

Since January 1, 2018, the age of eligibility for the tax credit for experienced workers has been lowered from 63 to 62. The new beneficiaries will thus have the right to a tax credit of up to $600. Moreover, the gradual increase of the work income limits will come to term in 2018; this limit will grow from $4,000 to $6,000 for 63-year-old workers, from $6,000 to $8,000 for 64-year-old workers and from $8,000 to $10,000 for workers who are 65 or older.

Indexation of the income tax system

Finally, the indexation of the personal income tax system, at the rate of 0.82%, will generate an annual gain of nearly $229 million for Quebec households. This indexation will also apply to social assistance payments, which represents a $22 million increase for recipients.

Quote:

Since 2014, we’ve done exactly what we said we would do. We did what had to be done to restore public finances and reboot the economy. Thanks to our actions, the favourable context now makes it possible to accelerate the implementation of our plan to reduce Quebecers’ tax burden while controlling our debt in order to ensure intergenerational equity.

We are determined to tangibly improve the quality of life for families in Quebec, both today and for the years to come. These measures are only a few examples of our daily actions to this effect.

We have a plan for a new Quebec—a structured, balanced and realistic plan that will benefit every family.

– Carlos J. Leitão, Minister of Finance