Each year, the provincial budget includes measures that directly impact your business, which is why we work to ensure that the government takes your interests into account. We met with Quebec’s new Minister of Finance, Éric Girard, in January to give him your perspectives.
You can also ask the minister to support your business in his next budget.
Labour shortages: swift action required
The shortage of labour is the number one economic issue right now: as of the third quarter of 2018, nearly 118,000 jobs in Quebec were unfilled. We have asked the government to implement concrete measures that will give you access to the workforce you need to keep your business going and growing.
In particular, we are asking for:
- Improved tax measures to encourage experienced workers and retirees to continue working for as long as possible
- Lower tax rates for people working overtime or multiple jobs
- Better alignment between immigrant profiles and the labour market needs
- Measures to help small businesses absorb the costs of recruiting internationally
Boosting your competitive edge
Although Quebec’s small business income tax rate will be reduced to 4% by 2021, it will still be almost double the average for the rest of Canada, which is 2.5%. The payroll taxes you have to pay as an employer are also about 30% higher here than in other provinces. This is why we have asked the government to implement measures to help your business remain competitive, including:
- Fast-tracking the promised reduction of the small business income tax rate to 4%
- Phasing out contributions to the health services fund and shifting the employer/employee split for contributions to the Quebec Parental Insurance Plan (QPIP) to 50/50
- Restoring access to the reduced corporate income tax rate for all small businesses
Focus on digital technology and automation
Given the labour shortages and fierce competition several industries are facing, we have also suggested investing in digital technology and automation, such as by:
- Opening up automation assistance programs to all sectors (retail, hospitality, etc.) and adapting program criteria to accommodate small businesses
- Developing measures to help small businesses access expertise in innovation, automation, etc.
- Providing support for retail businesses adopting digital technologies
See a summary of our requests here (in French only). Still have questions? Want to be part of the discussion? Your CFIB counsellor is waiting for your call.
2018-2019 Quebec Budget: Good news for your business
The government of Quebec has tabled its budget for 2018-2019. You will be relieved to know that it includes a lot of good news for you! Your tax burden will be reduced; support to address labour shortages will be available to you; and several new measures will help you compensate (at least partially) for the additional costs associated with enhanced labour standards, QPIP and minimum wage increases.
In short, this is all good news that will allow you to maintain your competitive edge vis-à-vis businesses in neighbouring provinces! Your estimated savings are approximately $600 million!
At long last, some significant tax relief!
The budget provides a significantly lower tax rate in the service and building industries. This means that businesses in these industries (hospitality, etc.) will see their rates drop to 4% by 2021, from 8%, bringing them much closer to the average tax rate in the rest of Canada, i.e., 2.5%. The estimated savings are approximately $275 million per year for SMEs in these industries.
Your HSF contributions continue to decrease
The budget also provides for significant decreases in your contributions to the Health Services Fund by 2022 (HSF); these decreases are in addition to reductions announced in previous budgets. When the new reductions ($340 million/year) are combined with the tax relief mentioned above and other reductions already announced before 2018-2019 budget, the estimated savings will come to $906 million per year for SMEs in Quebec.
Labour shortages: The government has listened
Quebec also announced additional investments of $800 million to enable you to fulfil your labour requirements. The government is drawing directly on the recommendations we submitted on your behalf, showing that it has heard your urgent need. Some of the government’s intentions are:
- Introduce a new tax credit for training of SME workers ($75 million over time).
- Improve the tax credit for on-the-job training ($37 million over time).
- Make investments to accelerate development of technical/occupational training.
- Improve the tax credit for experienced workers and lower the eligibility age from 62 to 61.
- Encourage participation of immigrants in the labour market.
- Take steps to encourage prospecting/recruiting of foreign workers.
- Process immigration applications more quickly.
Some other measures that will help businesses like yours
You could also take advantage of a number of these new measures:
- An additional deduction for amortization of leading-edge technologies.
- An increase in financial assistance and relaxed regulations for Quebec cider producers and distillers.
A dark cloud looms in the blue sky
Quebec intends to follow the example of the federal government and limit income sprinkling with family members (however, there’s no mention about passive income). This announcement clouds the whole issue – and we will not stand idly by! You can rest assured that CFIB will continue to oppose this measure so that you can easily acknowledge the participation of your family members in your business.
Many more details will be available in the coming weeks. In the meantime, don’t hesitate to contact your CFIB Busin
New articles that might be of interest:
- La Presse : Québec ouvre les vannes [in French: Quebec opens the floodgates]
- Journal de Montréal : Budget Leitao 2018 : un répit fiscal pour les PME [in French: Leitão 2018 budget: tax relief for SMEs]
- La Presse : Québec se penche sur la fiscalité des PME [in French: Quebec looks at the taxation of SMEs]
- La Presse : Budget Leitao : les réactions [in French: Leitão budget: the reactions]
- Radio-Canada : Le budget des PME [in French: The SMEs budget]