Quebec employers are losing a tax credit for having workers aged 60+ years on their payrolls. The newly released 2024 provincial budget terminates the measure, five years after its inception, arguing that it does little to enhance the government’s intended objective to retain experienced workers in the labour force.
Cancellation of the refundable tax credit for employers with annual payrolls no greater than $7.5 million is projected to save nearly $252 million over the next five years, and is part of a broader tax credit overhaul that is expected to redirect an extra $1 billion to Quebec revenues by 2029. The larger share of that will come from a realignment of tax credits for IT ventures related to multimedia, film production and development of e-businesses.
The budget document confirms the government’s priority is “refocusing tax assistance to the IT sector on the highest value-added jobs,” allowing it to retrieve more than $874 million in revenue over the next five years. It also concludes incentives aren’t necessary to boost older workers’ attractiveness to employers.
“The government continues to encourage experienced workers to participate in the labour market, in particular by offering the tax credit for career extension under the personal income tax system, which benefits just over 350 000 taxpayers per year,” the budget document states.
For the 2024 tax year, qualifying employers will still be able to claim an applicable portion of the tax credit on their contributions for workers aged 60+ years from January 1st until budget day, March 12th. Small and medium businesses are also encouraged to make better use of the tax relief that continues to be available.
The budget document cites Revenu Québec data indicating that just 14 per cent of such business operators are taking advantage of tax credits, and suggests it’s “mainly because they are unfamiliar with the measures available to them and the application process”. Revenu Québec launched an outreach campaign in the fall of 2023 with the goal of providing information and support in applying for tax credits to up to 50,000 small and medium business by the end of 2027.
The latest adjustments to tax credits come ahead of a broader review of the tax system and government expenditures set to begin this spring. As well, five provincial agencies — Hydro-Québec, Loto-Québec, the Société des alcools du Québec, the Société québécoise du cannabis and Investissement Québec — have been instructed to identify “revenue optimization measures and expense rationalizations” that will allow them to collectively save $1 billion over the four years from 2025-26 to 2028-29.
“We all need to devote special efforts to improving the efficiency of government interventions in the tax system and the performance of Québec’s state-owned enterprises,” says Quebec’s Finance Minister, Eric Girard.
