(Quebec) Tax credit cut for nearly 200,000 workers aged 60 to 64, planting 100 million trees and steep bill for the storm Debbyhere are five things to know about the Legault government’s budget update.
Posted at 11:14 a.m.
Household in tax credits
The Legault government had committed to “examining its tax expenditures” to reduce the record deficit by $11 billion. In the budget update, it targets workers aged 60 to 64, who will lose their career extension tax credit starting in tax year 2025. This is a loss that can go up to $1500 per year. 195,000 workers will be affected, and will lose an average of $973. Quebec will thus recover nearly 220 million per year. “The age of eligibility for the tax credit for career extension will be raised to 65 to take into account changes in the labor market and later retirement,” explains the Ministry of Finance. The logic: the objective is to convince Quebecers to work beyond retirement age, which is now almost 65 years old, where there is a greater gap in the labor market participation rate between Quebec and Ontario.
100 million trees will be planted
Quebec and Ottawa will plant 100 million trees in public and private forests within seven years to fight climate change. The effort will be financed by the “two billion trees” program promised by Justin Trudeau. The Government of Canada will therefore pay 220 million to “enhance the efforts of the Government of Quebec aimed at increasing reforestation, particularly areas affected by natural disturbances and unproductive sites”. Quebec for its part adds 237 million in silvicultural work, and provides financial aid of 100 million in the form of a loan for wood processing companies, which are suffering at the moment due to a commercial dispute with the United States, and more difficult access to the resource due to the impact of historic wildfires in 2023.
Quebec improves work income supplements for social assistance recipients
The Legault government will increase the work income supplement for social assistance recipients to 25%. Currently, a person receiving social assistance can earn $2,500 per year without having their benefits cut. Then, every dollar of wages earned is removed 100% of the benefit. With this measure, we take away 75%. The objective: to allow them to keep a greater share of their earned income, and thus “to encourage the integration of people further from the labor market” in a context of labor scarcity, and “to improve their security financial”. This is not a big expense for the state: 9.8 million over five years.
Money for public transport companies
Quebec will pay approximately $880 million to public transport companies to cover part of their anticipated shortfall from 2025 to 2028. In its budget document, the Ministry of Finance deplores the significant increase in “operating costs” of public transport since several years, and emphasizes that the transitional aid will end in 2028, which risks setting teeth in several municipalities. It will then be up to transport companies to make cuts and cut costs to balance their budgets. The ministry points to a report by the firm Raymond Chabot Grant Thornton commissioned by the MTQ which concludes that transport companies could reduce their expenses by 350 million. Experts suggest, for example, subcontracting driver services to reduce costs, modifying clauses in collective agreements, reducing the number of buses in preventive maintenance or in reserve and grouping certain services between transport companies.
Debby will cost 250 million
The record rainfall caused by the passage of post-tropical storm Debby left its mark on the Quebec budget, which had to disburse the sum of 250 million. These sums will be used to “assist victims and rebuild infrastructure damaged by the floods which occurred in the summer of 2024”. Quebec is now adding $12 million to “improve the response to floods and disasters”.
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