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A new plan to reduce health services fund contribution rates for all small and medium-sized businesses will take effect in 2017.

Small and medium-sized businesses in the primary and manufacturing sectors

For employers in the primary and manufacturing sectors whose total payroll is less than or equal to $1 million, the health services fund contribution rate will gradually decrease from 1.6% to 1.45% over a five-year period beginning in 2017. Employers whose total payroll is between $1 million and $5 million will also see a gradual reduction in their contribution rate.

Total payroll up to $1MCurrent rate1.6%Rate for 2017 1.55%Rate for 2018 to 20201.5%Rate as of 20211.45%

For more information, see pages A.29 to A.32 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Small and medium-sized businesses in the service and construction sectors

For employers in sectors other than the primary and manufacturing sectors whose total payroll is less than or equal to $1 million, the health services fund contribution rate will gradually decrease from 2.7% to 2% over a five-year period beginning in 2017. Employers whose total payroll is between $1 million and $5 million will also see a gradual reduction in their contribution rate.

Total payroll up to $1MCurrent rate2.70%Rate for 2017 2.50%Rate for 2018 2.30%Rate for 2019 2.15%Rate for 2020 2.05%Rate as of 20212.00%

For more information, see pages A.32 to A.34 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Temporary reduction of the health services fund contribution for the hiring of specialized workers

For any year after 2016, the temporary reduction rate for the health services fund contribution for an employer whose total payroll is more than $1M will be equal to:

• for employers in the primary or manufacturing sector:
  • 1.55% for 2017
  • 1.50% for 2018 to 2020
• for employers in other sectors:
  • 2.50% for 2017
  • 2.30% for 2018
  • 2.15% for 2019
  • 2.05% for 2020

For more information, see pages A.34 to A.35 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

An income-averaging mechanism will be introduced on a temporary basis. This mechanism will, for the purposes of income tax and the individual contribution to the health services fund, make it possible to average a portion of the income generated by non-retail sales of timber produced in a private forest for a period not exceeding seven years.

This mechanism will apply to an eligible individual or a qualified corporation which, at the end of a particular taxation year ending after March 17, 2016, but before January 1, 2021, is either a certified forest producer in respect of a private forest or a member of a qualified partnership that is a certified forest producer in respect of a private forest at the end of the partnership's fiscal period ending in the year.

Income-averaging mechanism for the purposes of calculating income tax

The tax legislation will be amended to stipulate that an eligible individual or a qualified corporation may deduct, in calculating taxable income for the year, an amount not exceeding 85% of the lesser of the following amounts: $200,000 or the amount determined according to the formula (A − B) + (C − D), that is, the income earned from certified commercial activities minus the losses resulting from these activities.

An individual or a corporation, as applicable, that has deducted, in calculating the taxable income for a particular taxation year, an amount from certified commercial activities in respect of a private forest will be required to include in calculating taxable income:

• for each of the six taxation years following the particular taxation year, an amount that cannot be less than 10% of the amount so deducted, up to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted;
• for the seventh year following the particular year, an amount equal to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted.

An individual will be considered an eligible individual for a particular taxation year if the individual resides in Québec at the end of that year. A qualified corporation for a particular taxation year is a Canadian-controlled private corporation with paid-up capital, taking into account the paid-up capital of any corporations with which it is associated in the taxation year, is at least $15 million for its previous taxation year.

An individual, corporation or partnership, as applicable, will be considered to be a certified forest producer at any time in respect of a private forest if the individual, corporation or partnership at that time holds a certificate as a certified forest producer issued under the Sustainable Forest Development Act in respect of that private forest.

The certified commercial activities in respect of a private forest mean the non-retail sales of timber produced in that private forest to a buyer having an establishment in Québec.

For more information, see pages A.44 to A.48 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Income-averaging mechanism for the purposes of calculating the individual contribution to the health services fund

An individual who so chooses may deduct, in calculating his or her total income for a particular year, an amount equal to the amount that he or she deducted for the purposes of the tax system in calculating his or her taxable income for the year under the income-averaging mechanism for forest producers.

However, an individual who makes such a choice for a particular year will be required to include, in calculating his or her total income for each of the seven years following the particular year, an amount equal to the amount that, for the purposes of the tax system, was included in calculating his or her taxable income for that year under the income-averaging mechanism for forest producers.

For more information, see pages A.48 and A.49 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

An income-averaging mechanism will be introduced on a temporary basis. This mechanism will, for the purposes of income tax and the individual contribution to the health services fund, make it possible to average a portion of the income generated by non-retail sales of timber produced in a private forest for a period not exceeding seven years.

This mechanism will apply to an eligible individual or a qualified corporation which, at the end of a particular taxation year ending after March 17, 2016, but before January 1, 2021, is either a certified forest producer in respect of a private forest or a member of a qualified partnership that is a certified forest producer in respect of a private forest at the end of the partnership's fiscal period ending in the year.

Income-averaging mechanism for the purposes of calculating income tax

The tax legislation will be amended to stipulate that an eligible individual or a qualified corporation may deduct, in calculating taxable income for the year, an amount not exceeding 85% of the lesser of the following amounts: $200,000 or the amount determined according to the formula (A − B) + (C − D), that is, the income earned from certified commercial activities minus the losses resulting from these activities.

An individual or a corporation, as applicable, that has deducted, in calculating the taxable income for a particular taxation year, an amount from certified commercial activities in respect of a private forest will be required to include in calculating taxable income:

• for each of the six taxation years following the particular taxation year, an amount that cannot be less than 10% of the amount so deducted, up to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted;
• for the seventh year following the particular year, an amount equal to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted.

An individual will be considered an eligible individual for a particular taxation year if the individual resides in Québec at the end of that year. A qualified corporation for a particular taxation year is a Canadian-controlled private corporation with paid-up capital, taking into account the paid-up capital of any corporations with which it is associated in the taxation year, is at least $15 million for its previous taxation year.

An individual, corporation or partnership, as applicable, will be considered to be a certified forest producer at any time in respect of a private forest if the individual, corporation or partnership at that time holds a certificate as a certified forest producer issued under the Sustainable Forest Development Act in respect of that private forest.

The certified commercial activities in respect of a private forest mean the non-retail sales of timber produced in that private forest to a buyer having an establishment in Québec.

For more information, see pages A.44 to A.48 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Income-averaging mechanism for the purposes of calculating the individual contribution to the health services fund

An individual who so chooses may deduct, in calculating his or her total income for a particular year, an amount equal to the amount that he or she deducted for the purposes of the tax system in calculating his or her taxable income for the year under the income-averaging mechanism for forest producers.

However, an individual who makes such a choice for a particular year will be required to include, in calculating his or her total income for each of the seven years following the particular year, an amount equal to the amount that, for the purposes of the tax system, was included in calculating his or her taxable income for that year under the income-averaging mechanism for forest producers.

For more information, see pages A.48 and A.49 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

An income-averaging mechanism will be introduced on a temporary basis. This mechanism will, for the purposes of income tax and the individual contribution to the health services fund, make it possible to average a portion of the income generated by non-retail sales of timber produced in a private forest for a period not exceeding seven years.

This mechanism will apply to an eligible individual or a qualified corporation which, at the end of a particular taxation year ending after March 17, 2016, but before January 1, 2021, is either a certified forest producer in respect of a private forest or a member of a qualified partnership that is a certified forest producer in respect of a private forest at the end of the partnership's fiscal period ending in the year.

Income-averaging mechanism for the purposes of calculating income tax

The tax legislation will be amended to stipulate that an eligible individual or a qualified corporation may deduct, in calculating taxable income for the year, an amount not exceeding 85% of the lesser of the following amounts: $200,000 or the amount determined according to the formula (A − B) + (C − D), that is, the income earned from certified commercial activities minus the losses resulting from these activities.

An individual or a corporation, as applicable, that has deducted, in calculating the taxable income for a particular taxation year, an amount from certified commercial activities in respect of a private forest will be required to include in calculating taxable income:

• for each of the six taxation years following the particular taxation year, an amount that cannot be less than 10% of the amount so deducted, up to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted;
• for the seventh year following the particular year, an amount equal to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted.

An individual will be considered an eligible individual for a particular taxation year if the individual resides in Québec at the end of that year. A qualified corporation for a particular taxation year is a Canadian-controlled private corporation with paid-up capital, taking into account the paid-up capital of any corporations with which it is associated in the taxation year, is at least $15 million for its previous taxation year.

An individual, corporation or partnership, as applicable, will be considered to be a certified forest producer at any time in respect of a private forest if the individual, corporation or partnership at that time holds a certificate as a certified forest producer issued under the Sustainable Forest Development Act in respect of that private forest.

The certified commercial activities in respect of a private forest mean the non-retail sales of timber produced in that private forest to a buyer having an establishment in Québec.

For more information, see pages A.44 to A.48 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Income-averaging mechanism for the purposes of calculating the individual contribution to the health services fund

An individual who so chooses may deduct, in calculating his or her total income for a particular year, an amount equal to the amount that he or she deducted for the purposes of the tax system in calculating his or her taxable income for the year under the income-averaging mechanism for forest producers.

However, an individual who makes such a choice for a particular year will be required to include, in calculating his or her total income for each of the seven years following the particular year, an amount equal to the amount that, for the purposes of the tax system, was included in calculating his or her taxable income for that year under the income-averaging mechanism for forest producers.

For more information, see pages A.48 and A.49 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

An income-averaging mechanism will be introduced on a temporary basis. This mechanism will, for the purposes of income tax and the individual contribution to the health services fund, make it possible to average a portion of the income generated by non-retail sales of timber produced in a private forest for a period not exceeding seven years.

This mechanism will apply to an eligible individual or a qualified corporation which, at the end of a particular taxation year ending after March 17, 2016, but before January 1, 2021, is either a certified forest producer in respect of a private forest or a member of a qualified partnership that is a certified forest producer in respect of a private forest at the end of the partnership's fiscal period ending in the year.

Income-averaging mechanism for the purposes of calculating income tax

The tax legislation will be amended to stipulate that an eligible individual or a qualified corporation may deduct, in calculating taxable income for the year, an amount not exceeding 85% of the lesser of the following amounts: $200,000 or the amount determined according to the formula (A − B) + (C − D), that is, the income earned from certified commercial activities minus the losses resulting from these activities.

An individual or a corporation, as applicable, that has deducted, in calculating the taxable income for a particular taxation year, an amount from certified commercial activities in respect of a private forest will be required to include in calculating taxable income:

• for each of the six taxation years following the particular taxation year, an amount that cannot be less than 10% of the amount so deducted, up to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted;
• for the seventh year following the particular year, an amount equal to the amount by which the amount so deducted exceeds the aggregate of the amounts each of which is an amount included in the calculation of the taxable income for a previous taxation year in respect of the amount so deducted.

An individual will be considered an eligible individual for a particular taxation year if the individual resides in Québec at the end of that year. A qualified corporation for a particular taxation year is a Canadian-controlled private corporation with paid-up capital, taking into account the paid-up capital of any corporations with which it is associated in the taxation year, is at least $15 million for its previous taxation year.

An individual, corporation or partnership, as applicable, will be considered to be a certified forest producer at any time in respect of a private forest if the individual, corporation or partnership at that time holds a certificate as a certified forest producer issued under the Sustainable Forest Development Act in respect of that private forest.

The certified commercial activities in respect of a private forest mean the non-retail sales of timber produced in that private forest to a buyer having an establishment in Québec.

For more information, see pages A.44 to A.48 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Income-averaging mechanism for the purposes of calculating the individual contribution to the health services fund

An individual who so chooses may deduct, in calculating his or her total income for a particular year, an amount equal to the amount that he or she deducted for the purposes of the tax system in calculating his or her taxable income for the year under the income-averaging mechanism for forest producers.

However, an individual who makes such a choice for a particular year will be required to include, in calculating his or her total income for each of the seven years following the particular year, an amount equal to the amount that, for the purposes of the tax system, was included in calculating his or her taxable income for that year under the income-averaging mechanism for forest producers.

For more information, see pages A.48 and A.49 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Effective as of the 2018 taxation year, the age of eligibility for the tax credit for experienced workers will be lowered to 62 years of age, the average retirement age of Quebecers. For this new category of workers, the maximum amount of eligible work income on which the tax credit will be calculated is $4,000.

For more information, see pages A.24 to A.27 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Effective as of the 2018 taxation year, the age of eligibility for the tax credit for experienced workers will be lowered to 62 years of age, the average retirement age of Quebecers. For this new category of workers, the maximum amount of eligible work income on which the tax credit will be calculated is $4,000.

For more information, see pages A.24 to A.27 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Effective as of the 2018 taxation year, the age of eligibility for the tax credit for experienced workers will be lowered to 62 years of age, the average retirement age of Quebecers. For this new category of workers, the maximum amount of eligible work income on which the tax credit will be calculated is $4,000.

For more information, see pages A.24 to A.27 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Effective as of the 2018 taxation year, the age of eligibility for the tax credit for experienced workers will be lowered to 62 years of age, the average retirement age of Quebecers. For this new category of workers, the maximum amount of eligible work income on which the tax credit will be calculated is $4,000.

For more information, see pages A.24 to A.27 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The Mining Tax Act will be amended to take into account the following:

• An operator will be allowed to elect, in its mining tax return for its fiscal year ended immediately before the time at which it ceased, for an indeterminate period, all activities related to its mining operations, to calculate its profit margin for the fiscal year by replacing the amount corresponding to its annual profit by an amount corresponding to its adjusted annual profit.
• The transfer of depreciable property with no immediate tax impact between related persons will apply only where the purchaser is an operator within the meaning of the Mining Tax Act for the fiscal year in which the purchaser acquires the property.
• The proceeds of alienation of property deemed to have been alienated, where a person ceased all activities related to its mining operation, will be adjusted to allow for a transfer of the property with no immediate tax impact to a person that is related to the person and that is an operator within the meaning of the Mining Tax Act.
• An operator will no longer be required to reimburse the Minister of Revenue for expenses paid for the services of a valuator mandated by the Minister for the purpose of determining the gross value of the annual output of gemstones.
• An operator will be required to provide the facilities and equipment (other than computer equipment) enabling the valuator mandated by the Minister of Revenue to valuate the gemstones extracted from the mine. 

For more information, see pages A.92 to A.98 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The Mining Tax Act will be amended to take into account the following:

• An operator will be allowed to elect, in its mining tax return for its fiscal year ended immediately before the time at which it ceased, for an indeterminate period, all activities related to its mining operations, to calculate its profit margin for the fiscal year by replacing the amount corresponding to its annual profit by an amount corresponding to its adjusted annual profit.
• The transfer of depreciable property with no immediate tax impact between related persons will apply only where the purchaser is an operator within the meaning of the Mining Tax Act for the fiscal year in which the purchaser acquires the property.
• The proceeds of alienation of property deemed to have been alienated, where a person ceased all activities related to its mining operation, will be adjusted to allow for a transfer of the property with no immediate tax impact to a person that is related to the person and that is an operator within the meaning of the Mining Tax Act.
• An operator will no longer be required to reimburse the Minister of Revenue for expenses paid for the services of a valuator mandated by the Minister for the purpose of determining the gross value of the annual output of gemstones.
• An operator will be required to provide the facilities and equipment (other than computer equipment) enabling the valuator mandated by the Minister of Revenue to valuate the gemstones extracted from the mine. 

For more information, see pages A.92 to A.98 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The Mining Tax Act will be amended to take into account the following:

• An operator will be allowed to elect, in its mining tax return for its fiscal year ended immediately before the time at which it ceased, for an indeterminate period, all activities related to its mining operations, to calculate its profit margin for the fiscal year by replacing the amount corresponding to its annual profit by an amount corresponding to its adjusted annual profit.
• The transfer of depreciable property with no immediate tax impact between related persons will apply only where the purchaser is an operator within the meaning of the Mining Tax Act for the fiscal year in which the purchaser acquires the property.
• The proceeds of alienation of property deemed to have been alienated, where a person ceased all activities related to its mining operation, will be adjusted to allow for a transfer of the property with no immediate tax impact to a person that is related to the person and that is an operator within the meaning of the Mining Tax Act.
• An operator will no longer be required to reimburse the Minister of Revenue for expenses paid for the services of a valuator mandated by the Minister for the purpose of determining the gross value of the annual output of gemstones.
• An operator will be required to provide the facilities and equipment (other than computer equipment) enabling the valuator mandated by the Minister of Revenue to valuate the gemstones extracted from the mine. 

For more information, see pages A.92 to A.98 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

The Mining Tax Act will be amended to take into account the following:

• An operator will be allowed to elect, in its mining tax return for its fiscal year ended immediately before the time at which it ceased, for an indeterminate period, all activities related to its mining operations, to calculate its profit margin for the fiscal year by replacing the amount corresponding to its annual profit by an amount corresponding to its adjusted annual profit.
• The transfer of depreciable property with no immediate tax impact between related persons will apply only where the purchaser is an operator within the meaning of the Mining Tax Act for the fiscal year in which the purchaser acquires the property.
• The proceeds of alienation of property deemed to have been alienated, where a person ceased all activities related to its mining operation, will be adjusted to allow for a transfer of the property with no immediate tax impact to a person that is related to the person and that is an operator within the meaning of the Mining Tax Act.
• An operator will no longer be required to reimburse the Minister of Revenue for expenses paid for the services of a valuator mandated by the Minister for the purpose of determining the gross value of the annual output of gemstones.
• An operator will be required to provide the facilities and equipment (other than computer equipment) enabling the valuator mandated by the Minister of Revenue to valuate the gemstones extracted from the mine. 

For more information, see pages A.92 to A.98 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Fiscal legislation will be amended to provide that contributions made illegally or otherwise, directly or indirectly, for political purposes are not deductible in calculating a taxpayer's income from a business or property.

This change will apply to contributions made for political purposes after March 17, 2016.

For more information, see pages A.72 and A. 73 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Fiscal legislation will be amended to provide that contributions made illegally or otherwise, directly or indirectly, for political purposes are not deductible in calculating a taxpayer's income from a business or property.

This change will apply to contributions made for political purposes after March 17, 2016.

For more information, see pages A.72 and A. 73 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Fiscal legislation will be amended to provide that contributions made illegally or otherwise, directly or indirectly, for political purposes are not deductible in calculating a taxpayer's income from a business or property.

This change will apply to contributions made for political purposes after March 17, 2016.

For more information, see pages A.72 and A. 73 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Fiscal legislation will be amended to provide that contributions made illegally or otherwise, directly or indirectly, for political purposes are not deductible in calculating a taxpayer's income from a business or property.

This change will apply to contributions made for political purposes after March 17, 2016.

For more information, see pages A.72 and A. 73 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Under Québec fiscal legislation, a taxpayer that is a corporation or an individual, including a trust, is required to pay income tax for a taxation year equal to 10% of:

• the taxpayer's income from logging operations for the year; and 
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member, for the partnership's fiscal period that ends in the year.

Previously, a taxpayer was not required to pay the logging tax for a taxation year if:

• the taxpayer's income from logging operations was $10,000 or less for the year; or
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member was $10,000 or less for the partnership's fiscal period that ends in the year.

However, on March 17, 2016, the logging tax exemption was raised from $10,000 to $65,000 for a taxation year of a taxpayer beginning after that date.

For more information, see page A.99 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Under Québec fiscal legislation, a taxpayer that is a corporation or an individual, including a trust, is required to pay income tax for a taxation year equal to 10% of:

• the taxpayer's income from logging operations for the year; and 
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member, for the partnership's fiscal period that ends in the year.

Previously, a taxpayer was not required to pay the logging tax for a taxation year if:

• the taxpayer's income from logging operations was $10,000 or less for the year; or
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member was $10,000 or less for the partnership's fiscal period that ends in the year.

However, on March 17, 2016, the logging tax exemption was raised from $10,000 to $65,000 for a taxation year of a taxpayer beginning after that date.

For more information, see page A.99 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.

Under Québec fiscal legislation, a taxpayer that is a corporation or an individual, including a trust, is required to pay income tax for a taxation year equal to 10% of:

• the taxpayer's income from logging operations for the year; and 
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member, for the partnership's fiscal period that ends in the year.

Previously, a taxpayer was not required to pay the logging tax for a taxation year if:

• the taxpayer's income from logging operations was $10,000 or less for the year; or
• the taxpayer's share in the income of a partnership carrying on logging operations of which the taxpayer is a member was $10,000 or less for the partnership's fiscal period that ends in the year.

However, on March 17, 2016, the logging tax exemption was raised from $10,000 to $65,000 for a taxation year of a taxpayer beginning after that date.

For more information, see page A.99 of the document entitled Additional Information 2016-2017 (PDF – 2.88 MB), published by the Ministère des Finances.