Corporate subsidies cost $945 per Quebecer

• Since 2018, total corporate subsidies have increased by 46.2 per cent, after adjusting for inflation.

Montreal, July 8, 2026 – Quebec could offer businesses the lowest tax rates in North America if it replaced the subsidies it pays out with corporate tax rate reductions, points out the MEI.

The Quebec government granted over $8.5 billion in subsidies in 2024, the most recent year for which data are available. This compares with 4,8 billions in 2018. Adjusted for inflation, this represents a 46,2 percent increase since 2018 and amounts to $945 of subsidies paid out for every Quebecer.

“Whether it’s Northvolt, Lion Electric, or others, subsidies have been costly for Quebecers,” says Renaud Brossard, vice president of communications at the MEI. “Instead of trying to choose winners and losers with our money, the government should create the kinds of conditions that favour business creation and growth.”

The current approach calls to mind the failure of the battery sector. The Northvolt battery plant project received over $500 million in public funds before the company declared bankruptcy. Lion Electric, manufacturer of electric school buses, received nearly $150 million before its setbacks. Nemaska Lithium, another megaproject in this sector, has swallowed up almost $1.2 billion in public funds.

Indeed, the latest report from the Auditor General of Québec criticized the battery sector strategy, saying it was not properly planned or adequately analyzed.

Reducing the corporate tax burden

During the 2024-2025 fiscal year, the Quebec government collected $13.3 billion in corporate income taxes. For each dollar collected in corporate income taxes that year, the Quebec government paid out 64 cents in subsidies to selected private corporations.

Based on the average annual subsidies paid out since 2018, the MEI estimates that eliminating subsidies would allow the government to reduce the corporate income tax rate by seven percentage points without affecting its financial situation. The provincial corporate income tax rate would thus fall from 11.5 per cent to 4.5 per cent.

Adding in federal taxes, the combined rate would be 19.5 per cent. An MEI Viewpoint published last year showed that this would give Quebec the lowest corporate tax rate of any jurisdiction in North America.

“Contrary to subsidies, a lighter tax burden would benefit all of our entrepreneurs without risking billions of dollars of our money,” concludes Renaud Brossard. “Quebecers deserve better than to see successive governments losing the money from their taxes on bad bets.”

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The MEI is an independent public policy think tank with offices in Montreal, Ottawa, and Calgary. Through its publications, media appearances, and advisory services to policymakers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.

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