Your Quebec car insurance bill will rise in January — Here's why & how much
The tax on your car and home insurance is going up, even if your insurer doesn't raise its rates. 🚗
On January 1, 2027, the tax Quebec adds to insurance premiums goes up
Insurance bills rarely come with good news, and the first one you pay in January will carry a small surprise.
On January 1, 2027, the tax Quebec adds to insurance premiums goes up. That means the tax on your car and home insurance will be a bit higher, even if your insurer doesn't touch its rates.
The change was announced in the Quebec government's March 2025 budget and became law that fall. Nothing about your coverage changes, but the total you pay will.
Why the tax is going up
Quebec doesn't charge the sales tax (QST) on insurance. Premiums carry their own tax instead, which is currently 9%, compared with 9.975% for the QST.
From January 1, the insurance premium tax will match the QST at 9.975%. Revenu Québec says the new rate applies to premiums paid after December 31, 2026.
The government argued in its budget that its review found no reason for the insurance tax to be lower than the sales tax. It also noted that the two rates were identical when the tax was created in 1985. The measure is expected to bring in about $996 million over four years.
Bill 99 passed on October 22, 2025, and received royal assent on October 28.
How much more you'll pay
The increase works out to 0.975 per cent of your premium before tax. For most people, that's less than one per cent on the total bill.
Here's what that looks like on a few annual premiums:
- $1,000 premium: tax goes from $90 to $99.75, or $9.75 more
- $1,500 premium: tax goes from $135 to $149.63, or $14.63 more
- $2,000 premium: tax goes from $180 to $199.50, or $19.50 more
These are examples, not averages, so your own number depends on what you pay. The government's own illustration in the budget is a household that pays $4,000 a year in taxable premiums, such as car and home insurance combined. That household would pay $39 more per year.
When the new rate kicks in
The date you pay matters, not the date your policy started or renewed. A premium paid on December 31 is taxed at 9%, while one paid on January 1 is taxed at 9.975%.
If you pay monthly, your January payment is the first one taxed at the higher rate. If you pay once a year, the rate depends on the day the payment goes through. Your insurer or broker can tell you how it will apply to your account.
What it applies to
The higher rate covers premiums that are already subject to the tax, which includes car, home, condo and tenant insurance, as well as group plans offered through employers.
The budget says existing exemptions will continue, including individual life and health-type insurance and certain mandatory plans.
Protégez-Vous also reported that the tax applies to the insurance contribution Quebecers pay to the SAAQ, so it will show up when you renew your licence or plates in 2027. You can read more about how SAAQ costs are changing and follow the latest on the SAAQ's website.
Businesses can't claim this tax back as they can with the QST, according to Revenu Québec.
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