Small, start-up and exporting businesses were among the major beneficiaries of new fiscal measures introduced in Thursday’s provincial budget.
“It’s a positive sign being sent to small and medium-sized businesses on whom payroll taxes weigh heavily and hinder growth,” said Martine Hébert, vice-president and spokesperson for the Canadian Federation of Independent Business.
Starting in 2017, Quebec will be implementing a tax cut projected at $135 million for innovative Quebec businesses to support the marketing of their products.
“This advantageous tax rate will be an incentive for innovative businesses to choose Quebec for their high value-added manufacturing and research and development activities,” the budget document stated.
The government also plans to allot as much as $8 million this year to a fund supporting the projects of female entrepreneurs.
More than $160 million will be allocated over five years to implement a provincial digital strategy, which includes enhanced tax credits for integrating information technologies in small businesses.
Economic Development Minister Dominique Anglade noted that fewer than 20 per cent of Quebec businesses are equipped for e-commerce, a number that needs to be increased.
“The use of digital technology by businesses helps increase productivity, foster innovation and create jobs. Quebec must position itself to capitalize on opportunities created by these new technologies and continuously adapt to emerging global trends,” Finance Minister Carlos Leitão said.
Parti Québécois finance critic Nicolas Marceau said some of the budget measures had merit, but “there’s a lot of recycling,” “no overall vision” and “no impact on economic growth, job growth or investment.”
Quebec will introduce a sizable rate cut for electricity for companies in the manufacturing and natural resource processing sectors that make qualifying investments. The savings are projected at $539 million over four years.
Investments that reduce greenhouse-gas emissions will get an additional rebate of 10 per cent of the cost.
The struggling forestry sector gets initiatives totalling $230 million to help it become more competitive.
Quebec said it will spend $620 million for “mine-site remediation” in various regions, including Abitibi-Témiscamingue and the North Shore.
Another $45 million will go to support the development of agri-food businesses, $67 million to the tourism industry, $70 million for a new aerospace strategy, $34 million to bolster competitiveness in life sciences and $34 million “to foster culture and artistic activity.”
Small businesses will see payroll taxes reduced. The contribution to the health services fund of businesses with a payroll of $1 million or less will be gradually reduced by 2021, to 1.45 per cent from 1.6 for the primary and manufacturing sectors and to 2.0 per cent from 2.7 for the service and construction sectors.
Quebec said it also will accelerate tax relief for transfers of family businesses in the primary and manufacturing sectors, originally scheduled for 2017.
The provincial tax credit for labour-sponsored fund Fondaction will be raised to 20 per cent from 15 per cent for two years, starting in 2017, with a commitment from Fondaction to invest at least $50 million over two years in projects that “positively contribute to the reduction of the impact of climate change.”