Québec Economic Update – 2018

On December 3, 2018, the Minister of Finance, Éric Girard, presented an update on Québec’s economic and financial situation.

The following is a summary of the major tax changes announced.

Personal Income Tax

Payment of a more generous family allowance

Since 2005, Québec families have been receiving a refundable tax credit for child assistance to help them provide for the needs of their minor children.

Beginning in 2019, there will be two changes to the child assistance payment:

·      The maximum amount granted for the second and third child will be increased by $500; the amount will rise from $1,235 to $1,735 and will continue to be indexed thereafter

·      The child assistance payment will be renamed “family allowance”

Freeze on the additional contribution for childcare

The government announced that the additional contribution for childcare will be frozen at the 2018 amount starting in 2019.

For 2019, the daily rate for subsidized childcare will consist of:

·      an estimated basic contribution of $8.25 payable to the childcare service

·      an additional contribution payable when an income tax return is filed; the amount will range from $0.70 to $13.90 based on income, for a daily rate of between $8.95 and $22.15

The 2019 freeze on the additional contribution for childcare is the first step towards its elimination, which will occur gradually beginning with the next budget. However, the basic contribution will continue to be indexed annually.

New assistance measure for seniors aged 70 or older

To support low-income seniors, the government announced the introduction of the senior assistance amount.

The amount of the new refundable tax credit for low-income seniors aged 70 or older will be $200, to take effect in 2018. Seniors will be able to claim the tax credit when they file their next income tax return in the spring of 2019.

The refundable tax credit is designed to improve the support provided to the seniors with the greatest need. It will be reduced at a rate of 5% starting at a family income of:

·      $22,500, in the case of single seniors aged 70 or older

·      $36,600, in the case of senior couples in which one of the spouses is aged 70 or older

As of 2019, the parameters of the measure will be indexed annually.

This bulletin was prepared by Advanced Financial Planning for Consultants. The purpose is to advise you of current developments, not to provide legal advice. Clients must consult their professional advisors for advice based on specific circumstances.