Quebec Announced A Big Income Tax Cut — Here's Who'll Save The Most Money

"Starting this year, we are going to relieve the wallets of Quebecers thanks to a 1% reduction in the first two tax brackets," Quebec's Finance Minister, Eric Girard, said on Twitter as part of the province's 2023-2024 budget announcement.

The new budget's tax changes would affect 4.6 million of Quebecers who are struggling to navigate ongoing inflation and cost of living increases over the past several months, according to a recent press release.

The tax cuts Girard referenced are intended to increase Quebecers' disposable income in the face of these challenges and could add up to $814 in savings for individuals and $1,627 for couples whose income reaches the top of the second tax bracket.

But because it's a flat 1% cut across both the second and first brackets, Quebecers whose income doesn't exceed the first bracket will see smaller savings in terms of the dollar amount. Someone making $30,000, for example, would see their tax rate go from 15% to 14%, for about $300 in savings. Someone making the provincial minimum wage (about $25,935 a year for 35 hours a week and 52 weeks) would save about $260.

According to the Finance Minister, higher tax rates are "a hindrance to Quebec's economic growth," something the CAQ-led government is attempting to improve through multiple initiatives, including changes to the Quebec Pension Plan (QPP).

Such changes include raising the maximum age for applying to a retirement pension from 70 to 72 and making contributions to the QPP optional starting from age 65.

The cost of lowering taxes is $9.2 billion, according to the release, a sizable portion of the $24 billion being invested in Quebec's five-year budget.

According to the Finance Minister, the budget deficit has been reduced as compared to a March 2022 forecast, from approximately $6.5 billion to $5 billion. This latest budget calls for this deficit "to be limited to $4.0 billion in 2023-24 and then gradually reduced by $1.0 billion per year until the budget is balanced in 2027-28."

This article's cover image was used for illustrative purposes only.