Budget: Quebec tax cut for 2023-2024
Quebec Minister of Finance, Eric Girard.
Unsurprisingly, the budget tabled Tuesday by the Minister of Finance, Eric Girard, confirms a tax reduction of 1% for the first two levels of taxation in the province. This is a major tax cut with the aim of helping the middle class financially in an inflationary context by putting “more money in the pockets of Quebecers”.
Taxes are going down therefore from 15% to 14% for people who earn up to $49,275 per year. For people with an annual salary between $49,275 and $98,540, the tax rate goes from 20 to 19%, while people with a salary above $98,540 will not benefit from a tax reduction.
As an indication, a person living alone earning $20,000 annually will pay $8 in income tax in 2023-2024. For someone with an annual salary of $40,000, they will pay $210 and for someone earning $60,000, the new figures are counted at $428. For people earning an annual salary of $100,000, the tax rate is $814.
For couples, those who mutually earn $20,000 or less will still not pay tax. For combined salaries of $40,000, the tax reduction is calculated at $56 and $456 for couples with a combined salary of $80,000. For couples earning $200,000 mutually, the tax reduction corresponds to $1,627.
Along with this tax cut, the provincial government will increase spending on health and social services, education and higher education by between 5.7% and 10.1%. As for access to pension plans, the minimum age is maintained at 60.
Towards a balanced budget
The Minister of Finance maintains that 2023 will be a difficult year, saying that growth in economic activity will drop from 2.8% in 2022 to 0.6% in 2023. He adds that a recession or higher growth strong are two possible “alternative scenarios” this year and would affect the return to a balanced budget.
The budget deficit will be limited to $4 billion in 2023-2024, and then reduce by $1 billion per year until a balanced budget is achieved, expected in 2027-2028.
In this regard, an improvement in the economic situation could accelerate the elimination of the deficit before the expected year. “If a deterioration in the economic situation were to occur, recourse to the contingency reserve integrated into the financial framework would avoid postponing the return to a balanced budget,” specifies the Ministère des Finances.