Québec budget: gradual elimination of the additional contribution for childcare

Éric Girard, the Minister of Finance of Québec, tabled his government's 2019-2020 budget yesterday afternoon. The budget contains few fiscal measures; the main measures are intended to help extend the careers of experienced workers.

Gradual elimination of the additional contribution for childcare

The budget proposes that the additional minimum and maximum contributions be reduced by $0.70 per day starting in 2019. Families with income less than $78,320 will have no additional contributions to pay, and those whose income is $78,320 or higher will pay up to $13.20 per day.

In 2020 and 2021 the income levels above which families will have to pay the contribution will be raised to $108,530 and $140,065 respectively. The maximum additional daily contribution will be $8.80 in 2020 and $4.40 in 2021; it will be completely eliminated in 2022.

Enhanced tax credit for experienced workers

The budget proposes the following changes, starting in 2019, to the tax credit for experienced workers with eligible employment income in excess of $5,000:

  • the credit will be renamed "tax credit for career extension";
  • the age of eligibility will be lowered from 61 to 60; and
  • the ceiling on excess work income will be raised to $10,000 for workers aged 60 to 64; under the current rules, the ceilings range from $3,000 to $9,000 depending on the worker's age.

Changes to certain measures relating to tips

With respect to the refundable tax credit for the reporting of tips by employers in the restaurant and hotel sector, the budget proposes that the new indemnities attributable to tips paid by employers for absences due to family obligations or health reasons under the Act respecting labour standards be added to the eligible expenses. This amendment applies to indemnities paid as of 2019, and also applies to unincorporated employers.

New initiatives to ensure tax fairness

To counter tax evasion and abusive tax avoidance, the government will be implementing measures to:

  • Increase tax compliance with respect to financial market transactions. To deal with the lack of uniformity in the information that securities dealers and brokers provide to investors, Revenu Québec, in collaboration with the financial sector, will introduce a new tax slip that will simplify the reporting of financial market transactions;
  • Foster tax fairness in the sharing economy by making it mandatory for individuals who operate a digital accommodation platform in tourism regions where the tax on lodging applies to register for the tax, collect the tax and remit it to Revenu Québec;
  • Extend the Attestation de Revenu Québec to public-building cleaning contracts in the amount of $10 000 or more; the administrative terms and conditions will be specified at a later date;
  • Block access to public contracts for businesses and promoters on which a penalty has been imposed further to an assessment for abusive tax avoidance strategies; and
  • Strengthen the mandatory disclosure mechanism and improve the rules governing the use of nominees. With this aim in mind, amendments--to be announced at a later date--will be made to the tax legislation.
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This document is intended to provide information of a general nature, which is not to be considered as tax advice. Although reasonable measures have been taken to ensure the accuracy of this information, Desjardins does not provide any guarantee of its accuracy.