Q & A: Tax specialist explains what Quebec Budget 2023-2024 means for you
Q & A: Tax specialist explains what Quebec Budget 2023-2024 means for you
CTV News Montreal's Caroline Van Vlaardingen spoke to BDO Canada tax partner Ernie Furt about what Quebec's new budget means for taxpayers. You can watch the full interview above and read the full transcript below.
Caroline Van Vlaardingen: So, Ernie, the finance minister is calling it the most important tax cut in recent history of Quebec, or in the history of Quebec—4.6 million Quebecers will see tax cuts. Let's talk again about what it will represent for individuals and couples.
Ernie Furt: Well, let's take a look at different taxable income levels. If you're a single individual earning $40,000, it means $210 to you. If you're a couple earning $40,000, it means $56 to you. At the $100K level, if you're single, it means $814. And if you're a couple, it means $1,627. So, that's pretty good at the end of the day. And the good thing about it is, if you're a higher income earner, you're not clawed back this amount. So, this is a permanent cut. And as long as it remains there and people can earn what they earn, as Eric Girard said, they can benefit from this tax cut.
Quebec budget 2023 tax cuts Caroline Van Vlaardingen:So often Quebecers say the more you earn, the more you pay. So, this is kind of nice that it does allow higher income earners, you know, those who earn more, to also benefit from a tax cut. There's something interesting about the QPP Quebec pension plan as well. Let's talk about that for a second. What's going on here?
Ernie Furt: Well, they are encouraging older workers to continue to work. So, currently, if you work and you're over the age of 65, and forever you are paying QPP on your earnings, on a salary or as a self-employed worker. However, starting in January 2024, if you reach the age of 72, you no longer have to pay any QPP on your earnings. That's a $4K amount that you're actually saving if you're earning about $63,100 a year or more. So that's an interesting cut. And if you're self-employed, you can double that. So, that's one thing that they're doing.
Another thing that they're doing is you now are going to be able to have the option to stop paying QPP at age 65, provided you're taking it. You currently do not have that option in Quebec. You do have that option in Canada, but you don't have that option in Quebec.
Now, the last QPP issue that they're doing is, currently, you can take your QPP and defer it up to age 70, where you're getting an increase of 0.5 per cent per month, i.e. a six per cent increase in your baseline QPP payments. So they're allowing you to defer this until age 72, and I didn't see it but it's probably there where this 0.5 per cent increase per month is still going to be there. So if you don't need the money, you don't have to take it, but you have to look at the time value of money and how old you're going to be when you're going to die, but nobody knows that.
Caroline Van Vlaardingen: There was a funny moment, early in the tabling of the budget, Ernie, when the finance minister called it an anti-inflammatory budget instead of an anti-inflationary budget. Will this budget break down the inflammation of Quebecers who are feeling the high cost of living?
Ernie Furt: Quebecers will always be inflamed with something. So, will it? It depends. You know what? Just go out there, do what you got to do, and work. I wish everybody has to pay more taxes next year, because that means you've earned more than the previous year.
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Quebec budget 2023 tax cuts
