This year, the Quebec budget focused more on economic measures and investments announced for various programs than on tax measures.
From the outset, we would like to inform you that no changes to personal or corporate tax rates have been announced.
Québec government budget 2022-2023
In this file, you will find the executive summary prepared by Demers Beaulne covering the most important tax measures for companies and individuals. You can also continue reading below.
Corporate tax measures announced
Extension of the investment and innovation tax credit (“C3i”) bonus
The government has announced the extension of the temporary C3i rate subsidy for a further year, until December 31, 2023.
This credit is available to eligible companies acquiring manufacturing and processing equipment, general-purpose electronic data processing equipment or management software packages after March 10, 2020, but before January 1, 2025. Specific costs incurred for the purchase of this type of equipment are eligible for the credit, subject to certain conditions.
With the 2021-2022 Quebec budget, C3i rates were doubled for acquisitions covered by this credit taking place after March 25, 2021, but before January 1, 2023. The 2022-2023 Quebec budget extends the application of the doubled rates for one year, i.e. for acquisitions taking place after December 31, 2022, but before January 1, 2024. Thereafter, the credit at the regular rate will continue to apply for the period from January 1 to December 31, 2024.
Credit rates vary according to the economic vitality of the region where the business is located and where the property will be used. Following the 2022-2023 budget announcement, credit rates will therefore be determined as follows:
| Investment and innovation tax credit rates (C3i) | After March 10, 2020, but before March 26, 2021 | Temporary bonus after March 25, 2021, but before January1, 2024 | After December 31, 2023, but before January1, 2025 |
| Areas with low economic vitality | 20% | 40 % | 20% |
| Intermediate zone | 15% | 30% | 15% |
| High economic vitality zone | 10% | 20% | 10% |
For more information on C3i, you can read our full publication on this credit here.
Support for companies affected by the LA COVID-19 pandemic
The government has reiterated its commitment to supporting businesses hardest hit by the pandemic. To this end, it has been announced that the Programme d’Aide d’Urgence aux Petites et Moyennes Entreprises (“PAUPME”) and the Programme d’Action Concertée Temporaire pour les Entreprises (“PACTE”) will be extended for as long as the situation requires, according to the government.
For more information on PAUPME and PACTE, see the full article on the subject.
Tax measures announced for individuals
Introduction of refundable tax credit to offset rising cost of living
To offset the rising cost of living, eligible individuals with an individual net income of $100,000 or less for 2021 will be entitled to a $500 refundable tax credit. This credit will be reduced by 10% for each dollar of net income in excess of $100,000. The announced credit will therefore be nil when net income equals or exceeds $105,000. Given the high rate of inflation, this measure is designed to provide one-off assistance in response to the current inflationary situation.
To be eligible for this government assistance, an individual must, as of December 31, 2021, be a resident of Quebec, 18 years of age or older, and a Canadian citizen or permanent resident.
This means that all adults with an annual income of $100,000 or less, after tax deductions, will be entitled to it to meet their needs in the face of high inflation.
Renewal of the tax credit for upgrading residential wastewater treatment systems
The tax credit for upgrading residential wastewater treatment systems allows the reimbursement of 20% of eligible expenses in excess of $2,500, up to a maximum credit of $5,500 per dwelling. This credit, which was due to expire on April 1, 2022, has now been extended for a further 5 years, until March 31, 2027.
Enhanced refundable tax credit for home support for seniors (CMD)
The tax credit for home support for seniors has been enhanced. This credit is designed to reduce the cost of home care for people aged 70 and over. The government had already announced that the credit rate would rise from 35% to 40% of eligible expenses by 2026, an increase of 1% per year.
As part of the most recent budget, the government announced that the maximum amount of rent eligible for CMD for seniors living in apartment buildings will rise from $600 to $1,200 as of 2022. Also, for eligible people who fail to claim the credit, Revenu Québec will automatically calculate the credit based on a monthly rent of $600.
Permanence of the tax credit for a major cultural donation
Individuals making their first major donation to a cultural organization can benefit from a non-refundable tax credit representing 25% of their donation, up to a maximum of $6,250. This credit is in addition to the donation credit.
This credit, introduced in 2013, had been extended until December 31, 2022. However, in order to continue encouraging financial support in the cultural sector, the Quebec government has announced that this tax credit will now be permanent, eliminating the expiry date of late 2022.
Renewal of the elimination of interest on student loans for the years 2022-2023
The Quebec government will continue to provide student financial assistance by covering the interest on student loans payable between April 1, 2022 and March 31, 2023. This won’t reduce the monthly amounts students have to pay, but it will ensure that the debt is repaid more quickly.
Revision of the maximum rebate for the Roulez vert program
The subsidies offered for the acquisition of an electric vehicle under the Roulez vert program for the period from April 1, 2022 to March 31, 2023 have been revised downwards and will now be :
- 7,000 for new all-electric vehicles;
- 5,000 for new plug-in hybrid vehicles;
- 3,500 for used all-electric vehicles.
