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Budget 2017: Quebec must keep its promise and give taxpayers a break

Montreal, March 27, 2017 – With the next provincial budget due in the coming days, the government must honour its promise and give some relief to taxpayers, who have suffered through an avalanche of taxes and contributions of all kinds in recent years, shows a Viewpoint published today by the MEI.

For the 2016 fiscal year, Quebec has already accumulated a budget surplus of $2.3 billion. One of the Liberal Party’s electoral promises was precisely to allocate half of surpluses to tax reductions. Yet taxes and contributions to the public treasury have been on the rise since the beginning of the decade:

  • The 7.5% Quebec Sales Tax grew by one point in 2011 and again in 2012, before being harmonized at a little less than 10% in 2013.
  • Since 2014, the carbon market indirectly increases the pump price of gasoline by around $0.04 per litre, an amount that is expected to increase further.
  • The tax on a carton of cigarettes increased by $9.20 in just four years.
  • The tax on alcohol sold in retail stores increased, by $0.23 a litre for beer and $0.51 a litre for wine.
  • The tax rate on incomes over $100,000 went up in 2013, by 1.75 percentage points, to reach 25.75%.
  • Since 2012, Quebec Pension Plan contributions have increased by 0.15 percentage points per year, to reach the equivalent of 10.8% of an employee’s gross salary today.

“The list is significantly shorter on the tax reductions side of the ledger,” points out Mathieu Bédard, author of the Viewpoint. “The health contribution is the only significant decrease, but it came into effect during this same period. In reality, it was therefore an increase, albeit a temporary one,” he says, adding that Quebec continues to be the Canadian province where people are the most heavily taxed.

The consequences are very real for taxpayers. “Small amounts here and there accumulate and end up representing an appreciable sum that is piled on top of the already heavy burden that Quebec taxpayers are saddled with,” says Mathieu Bédard.

“Considering these numerous taxes and contributions that have gone up, the government has several good reasons to respect its electoral commitment to reduce taxes,” adds Michel Kelly-Gagnon, President and CEO of the MEI. “Not only would this reduce the burden on taxpayers, who certainly deserve some relief, but this would also have beneficial effects on the economy as a whole.”

The Viewpoint entitled “The 2017 Budget: Quebec Must Keep Its Promise to Reduce Taxes” was prepared by Mathieu Bédard, Economist at the MEI. This publication is available on our website.

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The Montreal Economic Institute is an independent, non-partisan, not-for-profit research and educational organization. Through its studies and its conferences, the MEI stimulates debate on public policies in Quebec and across Canada by proposing wealth-creating reforms based on market mechanisms. 

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Interview requests: Pascale Déry, Senior Advisor, Communications, Current Affairs, MEI / Tel.: 514-273-0969 ext. 2233 / Cell.: 514-502-6757 / Email: pdery@iedm.org

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