Business groups welcome cuts
Province focuses on labour shortage
QUEBEC Hoping to spur economic growth and deal with a labour shortage, Quebec is cutting some business taxes and focusing on training and immigration to help companies find qualified workers.
The measures, announced in Tuesday’s provincial budget and expected to cost more than $3 billion over five years, were met with cheers from Quebec business groups.
Quebec’s “small and mediumsized businesses are very vibrant and very dynamic portion of the economy” but they pay significantly more in payroll taxes than in other provinces, Finance Minister Carlos Leitão said.
He said the budget helps level the playing field for smaller companies and encourages job creation, though he admitted that even after the cuts, Quebec payroll taxes will be higher than those in other provinces.
Quebec economic growth depends on a qualified workforce, Leitão added, noting that’s a challenge due to demographic changes and rapidly evolving technologies.
That’s why the Liberal government will also spend on workforce training and integrating immigrants, he added.
Small and medium-sized businesses will see their tax burden reduced by $2.2 billion over five years.
That includes a $1.2-billion reduction in the amount these companies contribute to the Health Services Fund. For a company in the manufacturing sector with a payroll of $5 million, for example, the changes will mean a savings of $50,000 per year as of 2022.
In addition, small and mediumsized companies in the services and construction sectors are getting a tax break that will amount to $1 billion over five years. The reduction in the taxes could reach up to $20,000 per year for a company.
Due to a record low unemployment rate and an aging population with a high number of retirees, Quebec’s pool of available workers can’t keep up with demand.
“The labour shortage affecting almost all of Quebec is increasingly raising concerns,” Leitão said.
He set aside $810 million for a “national workforce strategy,” with more details to be announced in the coming weeks.
The plan will include a series of measures. More money will be spent teaching French to immigrants in order to make them more employable. More foreign workers will be recruited. Older unemployed workers will be eligible for more training. The government will also beef up a tax credit for older workers who want to stay in the workforce.
Small and medium-sized businesses had demanded tax relief to help them deal with recent provincial measures that will hike their costs, including a higher minimum wage and an increase in vacation time for workers.
Yves-Thomas Dorval, president of the Conseil du patronat du Québec, said the province’s biggest employers’ group is “very satisfied” with the budget.
“Quebec employers are looking for manpower,” he said. “That’s their priority and we have that in the budget.”