CPA Public Affairs
April 2018

QC: Québec Releases New Budget with Increased Spending

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(This article is provided courtesy of Hatley, Strategy Advisors)

Québec Finance Minister Carlos Leitão unveiled his fifth budget today, balancing it for the fourth year in a row. After a mandate of belt-tightening, this is the first budget with a significant increase in spending – even dipping into government reserves to the tune of $1.6 billion to pay for it. As with most pre-election budgets (a vote will take place in October of this year), critics are accusing the Liberal government of loosening the purse strings for electoral gain. The Couillard government cast this budget on three pillars: healthcare, education, and transportation. Overall, spending will increase by 4.5% next year, as opposed to 5.6% this year. Below are some of the key takeaways:

Financial support for projects to extend the natural gas distribution network
For the purpose of increasing access to natural gas, the March 2018 Economic Plan provides an additional $36.5 million to financially support new projects designed to extend the natural gas distribution network. Specifically, Montérégie, Estrie and Chaudière-Appalaches, where Énergir recently targeted major projects with economic potential, will be prioritized. Of the announced funding, $2.2 million will be reserved for conducting a study concerning the possibility of extending the gas network to the Saguenay-Lac-Saint-Jean region.

Projects funded will include a contribution by the natural gas distributor or the communities, to avoid affecting the fees paid by consumers. The Québec government will likely adopt the omnibus budget bill in the following weeks.

Tax measures
While there were no significant tax cuts, some good news for small business: the government will lower the corporate tax rate on service and construction companies to 4% from 8% by 2021. They will also raise the tax credit limit on non-subsidized daycare costs for families and create a new $750 tax credit for individuals who purchased their first home. Homeowners who make eco-friendly renovations will also be able to take advantage of the RénoVert tax credit up to $10,000 until March 31, 2019 – a one-year extension.

Public transport
The spending continued as the government committed $13 billion to transportation. Amongst other measures, spending will be channeled into two major projects in Montreal, and one in Québec City: $3.9 billion will go towards extending the Montreal metro’s blue line and Québec City’s strategic transportation network will receive approximately $3.3 billion.


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