The exclusion of Quebec workers aged 60 to 64 from the career extension tax credit, announced Thursday in the Minister of Finance’s economic update, worries the business community.
Posted at 4:22 p.m.
Frédéric Lacroix-Couture
The Canadian Press
According to the Conseil du patronat du Québec (CPQ), by increasing eligibility to 65 and over, there will “certainly be an impact on attracting or retaining experienced workers in the labor market.”
“We have certain concerns about the impact that this risks having because we know that we are still facing a labor shortage and we will continue to be in the coming years. […] This is a measure that made work more financially and fiscally attractive. Will this discourage some people? », Commented the vice-president of research and chief economist of the CPQ, Norma Kozhaya, in an interview.
This tax credit could represent a tax saving of $1,540 per year for these workers.
According to Minister Eric Girard’s statement, the establishment of this credit allowed Quebec to “catch up in the labor market participation of these people”, virtually eliminating the historic gap with Ontario .
Manufacturers and Exporters of Quebec (MEQ) recalls that the manufacturing sector is still experiencing the impacts of the labor shortage, with 13,000 currently vacant positions.
With 27% of workers aged over 55, a higher proportion than the average, the manufacturing sector will face a wall in the coming years. In this sense, the revision of the tax credit for experienced workers will probably not help to reduce pressure on the labor market.
Extract from a press release from Quebec Manufacturers and Exporters
The president of the Quebec Association for the Defense of the Rights of Retired and Pre-retired Persons (AQDR) also wonders whether the revision of this tax measure will reverse the initial objective sought.
“In my opinion, the impact on seniors will not be major, but it will be major in terms of the objective we were aiming for to increase the number of people available to continue working,” said Pierre Lynch , in interview.
According to a survey conducted among AQDR members, a good number of workers aged 60 to 64 who remain on the job market do so because they cannot count on a retirement plan, having instead to turn to towards government benefits, he stressed.
Mr. Lynch would also like to see more measures to help the most vulnerable seniors.
Aid for the forest industry welcomed
The economic community, however, welcomes the additional sums to support the forestry sector.
The Quebec Forest Industry Council (CIFQ) is particularly pleased with the creation of a 100 million loan program to support businesses affected, among other things, by the lumber conflict between the Canada and the United States.
In a press release, the CIFQ underlines “the government’s determination to find a rapid and agile response which will provide liquidity to businesses awaiting reimbursement of taxes overpaid during the first years of the conflict”.
In total, the Legault government promises to invest an additional 252 million over five years, which should allow, according to it, initiatives worth 540 million over the next seven years.
MEQ believes that this is a “step in the right direction for this essential sector for several regions of Quebec”.
However, the CSN judges that the loan program “comes late for a sector which has suffered business closures in recent months”. But the union organization describes as “positive” the investment measure for reforestation “to face growing environmental disasters”.
Other reactions
Several organizations commented on the economic update. Here are some of their reactions.
This update outlines additional strategic investments that will help economic sectors in need. In addition, the government has decided not to take the easy route of increasing taxes on small businesses, which is reassuring.
François Vincent, vice-president for Quebec at the CFIB
The update presented today by Minister Girard includes few announcements likely to have a significant short-term impact on the business community. The good news is that the minister is now forecasting better growth in Quebec’s economy than anticipated last March. This reflects a soft landing for the economy after a period of high inflation and very high interest rates.
Michel Leblanc, President and CEO of the Chamber of Commerce of Metropolitan Montreal
The economic update refers several times to the importance of productivity and we know to what extent it is a priority for the Legault government. However, no new measures were announced today, despite the record budget deficit of $11 billion and the arrival of a Trump administration in the United States.
Véronique Proulx, President and CEO of the Federation of Chambers of Commerce of Quebec
By postponing urgent investments in infrastructure such as the renovation of hospitals and schools, by freezing recruitment in health and social services, in the public service, and by cutting francization programs for immigrants, which is scandalous, this same government is in the process of creating another crisis, even though we all know that this can only lead to a reduction in services to the population.
Magali Picard, president of the FTQ
When we see the return of budget cuts, we clearly see that the cycle of austerity has started again. After cutting its revenues with tax cuts, the Legault government is creating a deficit from scratch for the coming years. If there is 10 billion left for the third link and billions for a drifting Northvolt, budget cuts are all the government has in store for our public services.
Caroline Senneville, president of the CSN
Various measures are aligned with the priorities of the municipal sector. They demonstrate a desire to take concrete action to support communities, strengthen their resilience and stimulate their development. However, it is crucial to continue efforts on homelessness. Considering the emergency situation experienced in all regions of Quebec, the amounts planned are inconsistent with the crying needs.
Martin Damphousse, president of the UMQ and mayor of Varennes
The government does not have a revenue problem, but a spending problem, and the increase in capital gains tax confirms this. This measure harms Quebec’s growth, it harms savers, and amounts to sacrificing our future prosperity for an influx of money this year.
Gabriel Giguère, senior public policy analyst at the Montreal Economic Institute
This update confirms that the government is choosing to increase spending at the expense of future generations instead of proposing a real plan to balance public finances.
Nicolas Gagnon, director for Quebec of the Canadian Taxpayers Federation
