2018 Quebec Fall Economic Update

The Quebec Minister of Finance Éric Girard and Premier François Legault presented the 2018 Quebec Fall economic update on December 3, 2018.

Here are the highlights of the tax measures contained in the Fall economic update.

MEASURES AFFECTING BUSINESSES

Harmonization with certain measures announced in the Fall Economic Statement 2018 of the Department of Finance Canada

On November 21, 2018, the Federal Minister of Finance announced temporary tax measures allowing accelerated tax depreciation for newly acquired assets.The Quebec Fall Economic Update provides that the Quebec tax legislation will generally be harmonized to the new federal rules, subject to certain exceptions.

Change to the additional capital cost allowance

The 2018 Quebec Budget previously introduced an additional capital cost allowance (CCA) of 60% for general-purpose electronic data processing equipment (Class 50) and manufacturing or processing equipment (Class 53). Subject to certain transition rules, this additional CCA of 60% is replaced by a new additional CCA of 30% as of December 4, 2018.

The new measure will be permanent and it will apply to contemplated property acquired after December 3, 2018. Contemplated property will designate manufacturing or processing equipment (Class 53), clean energy generation equipment (Class 43.1 and 43.2), general-purpose electronic data processing equipment (Class 50) and certain intellectual properties that meet specific conditions.

MEASURES AFFECTING INDIVIDUALS

Enhancement of the maximum amount of the child assistance payment for second and third children

Starting in 2019, the maximum amount of refundable tax credit for child assistance will be increased by $500 for the second and third children. As it is already the case, this maximum amount is subject to a downward adjustment based on the level of family income.

Introduction of a refundable tax credit for senior assistance

As of the 2018 taxation year, a refundable tax credit of $200 for a single senior and $400 for a senior couple is introduced. This credit is available to individuals aged at least 70 years at the end of the year. The amount of the credit will be reduced by $0.05 for every dollar of family income that exceeds $22,500 for a single taxpayer and $36,600 for a couple.

Should you require any further information, please contact your Crowe BGK advisor.

About the Authors:

Isabelle Nadeau, B.C.L., LL.B.,  LL.M Tax, is a Tax Manager at Crowe BGK

Connect with her: [email protected]

Jean-François Senécal, LL.B.,  D. Tax, is a Senior Tax Manager at Crowe BGK

Connect with him: [email protected]

Jianyi Li is a Tax Specialist at Crowe BGK

Connect with him: [email protected]