Bad news awaited the aluminum industry in Minister Girard’s budget. The sector is excluded for the moment from the tax credit on major investments, the centerpiece of the last budget with regard to companies.
In the past, some of the aluminum manufacturers have benefited from the tax credit in its earlier version.
For example, in its “Taxes Paid Reports”, Rio Tinto indicates that it has benefited from this tax holiday six times in recent years.
All is not lost for the Rio Tintos and Alcoas of this world, since Quebec reserves the right to change its mind and make the gray gold sector eligible for tax assistance.
“The government is continuing to analyze this sector of activity. The status of the latter may be reassessed upon completion of these analyses,” reads the fine print in the footnotes in the additional budget information.
Government assistance to the aluminum industry has come to the public’s attention recently as a manufacturer like Rio Tinto enjoys favorable electricity rates while paying little or no tax in Quebec these last years.
What do you think of this budget from Minister Eric Girard?
The budgetary measure in question consists of an improved version of the tax holiday relating to a large investment project of at least 100 million.
Other than aluminum, the other sectors excluded from the tax credit are construction, real estate, mining except for strategic minerals, pipeline construction, data centers and tobacco.
The old credit granted a credit of 15% of eligible expenses depreciable over 15 years. The new version has a term of 10 years and offers a credit varying between 15 and 25% depending on the region where the investment project is carried out.
By 2032, the government estimates that the measure will contribute to the realization of 100 projects worth more than 24 billion. Quebec estimates the cost of the measure at 373 million over 5 years.
According to Statistics Canada’s Annual Capital and Repair Expenditure Survey, Quebec ranks 3rd among Canadian provinces in terms of growth in non-residential investment intentions in the private sector with an expected increase of 10.3% , at 29.7 billion.
“The budget responds to several social and economic concerns, said Norman Kozhaya, vice-president and chief economist of the Conseil du patronat du Québec, such as the expansion of the tax holiday for investment projects. However, we remain on our appetite for more measures for experienced workers. There are a few measures that go through the Quebec Pension Plan (QPP), but we wanted more tax measures such as the tax credit for career extension. »
“There are several interesting measures to help SMEs deal with the labor shortage, particularly those affecting the QPP,” says François Vincent, vice-president for Quebec of the Canadian Federation of Independent Business. (CFIB). He applauds the reduction in personal income taxes.
Mr. Vincent also highlights the initiative to transmit data from employers’ payroll systems directly to Revenu Québec. “We’re going to watch it closely,” he says. We are already in contact with Revenu Québec on this transition. » Consultations will take place shortly. The goal is to reduce paperwork.
However, both the CFIB and the Fédération des chambres de commerce du Québec (FCCQ) deplore the absence of targeted measures to reduce the tax burden on SMEs.
“On the issue of immigration, we are happy to see that there is half a billion over 5 years to regionalize immigration, including francization, says Charles Milliard, CEO of the FCCQ. There is new money to help immigrants better recognize their skills. »
“It is a budget that is timid in terms of measures aimed at the manufacturing sector, deplores, for her part, Véronique Proulx, CEO of the Manufacturers and Exporters of Quebec. The government sprinkles, but there are no measures that will have a real impact and that will move the needle. We have two big challenges: the lag in productivity and the labor shortage. There is nothing that will change the game in the current economic context. »
