1. Tax Credit for Investments & Innovation
A new 10% tax credit will be available to corporations in the greater Montreal area for investments in manufacturing and processing equipment, computer equipment and systems software, and qualified management software package. Eligible expenditures made after the budget date and prior to 2025 can qualify for the tax credit which is refundable for companies with assets or gross revenues of $50M or less, and non-refundable for larger companies.
2. Health & Social Services
There will be a 4.5% increase in education and a 5.3% increase in health services. The latter includes $490M for primary care, access to specialized medicine and new cancer treatment. Included in the increase will be $625M in increased funding for seniors, $950M to enhance health services for youths in difficulty and $450M for additional youth protection workers. These increases will be phased in over 5 years.
3. Tax Credits in Support of R&D Activities and Innovation
Three measures are introduced to support activities in innovation. First, an incentive deduction for the commercialization of innovation in Quebec with the purpose to apply an effective tax rate of 2% on the net income for tax years starting in 2021, derived from the commercialization of intellectual property developed in Quebec. Second, the $50,000 exemption threshold introduced in December 2014 for R&D expenditures is eliminated for tax year beginning after the date of the budget. Lastly, in 2021 a new 30% tax credit is introduced to support investments made in the shares of companies operating in the fields of life sciences, manufacturing and processing, green technologies, artificial intelligence and information technologies.
4. Improved Caregiver Credit
$532M is budgeted for the next 5 years to increase the refundable tax credit for informal caregivers. An additional 30,000 individuals are expected to benefit. Qualifying individuals are those with a severe and prolonged impairment or who are aged 70 or older. The refundable tax credit will range from $1,250 to $2,500.
5. Green Initiatives
Following are some of the proposed green initiatives:
- $15.8 billion for public transit and electric transit projects in Montreal, Laval, Longueuil, Quebec City, Gatineau and Chambly;
- $6.7 billion over six years to build a green economy;
- $1.4 billion over six years for the Roulez Vert program to install charging stations and encourage people to buy electric cars;
- $150 million to continue the Chauffez Vert program through 2026, encouraging homeowners to replace their fossil fuel heating systems with electric or other renewable energy; and
- $473 million for flood mitigation.
Do not hesitate to contact our team for any specific questions relating to measures from the budget that impact you or your business.