Election Promises
Hello All,
The Quebec provincial election is quickly approaching and will take place on October 3rd. While it looks like the incumbent CAQ is going to win, by an even larger majority than the previous election, there is a possibility that the polls aren’t entirely accurate.
As in most elections, there are a slew of promises from each of the provincial parties, that try to appeal to the hearts and minds (and pocketbooks) of Quebeckers. These promises, as with the majority of election proposals, are somewhat haphazard and target measures that make for the best soundbites. The upside for us is that almost all parties are promising tax cuts which will have a direct impact on our bottom line.
The hot button issue for this province (and pretty much worldwide) is inflation and each of the parties want to be seen as doing something to target it. As mentioned several times in this newsletter, inflation has affected almost every Canadian and while it improved in July, compared with June, there is still no end in sight.
It is interesting to note that there has been an unanticipated surplus in tax revenues in Quebec (and by extension all of Canada) due to inflation. This is a consequence of higher sales tax on goods and services as well as an increase in business profits which then contributes to higher income tax. Of course, the taxpayer has had to bear this burden, so it would seem appropriate that we should receive some relief. Each of the various parties, perhaps recognizing this, are proposing tax cuts in slightly varying forms.
The CAQ wants to reduce the income tax rates for the lowest two tax brackets by 1% in 2023 and 2.5% over the next ten years. They also wants to give each Quebecker who earns less than a $100k a flat out bonus of between $400 and $600.
The liberals would like to reduce the income tax rates for the lowest two tax brackets by 1.5%. Additionally, they want to freeze Hydro Quebec rates and abolish the Quebec sales tax on the first $4,000 of Hydro charges. Finally they want to abolish QST on basic necessities. They promise that these measures, along with others to come, will save the average Quebeckers $5k per year.
The Conservative Party of Quebec has promised even more significant tax cuts than the ones proposed by the CAQ and the liberals, in the amount of about $2,000 a year for a worker earning $80,000. They have also promised to suspend the provincial gas tax.
Quebec Solidaire, similar to the liberals, think that the QST on essentials should be tax exempt until inflation returns to a more normalized 3%. The items which they would like to exempt from QST include food, clothing, repairs, medications and body care items.
Each of these measures is a somewhat transparent ploy to win votes. They work because they are tangible and most of us are happy to pay less tax and receive financial incentives. The problem, of course, is that it comes at the expense of longer term measures such as improving infrastructure, healthcare, education etc. and avoids dealing with inefficiencies and ineffectiveness of the governments in charge.
I’ve had some discussions with folks about the importance of registering online with Revenue Canada (and Revenue Quebec where applicable) recently. If you have a business, you should register for my business account as soon as you launch (or now if you haven’t already). My blog post covers the why and the how.
Blog Post
Why you should register for CRA and RQ My Business Account (and how to do it)
With all data moving to the cloud these days and ubiquitous online access to banking, customer and supplier portals, it makes sense that Revenue Canada (CRA) and Revenue Quebec (RQ) have followed
QuickBooks Tip: Categorize vs Transfer in Banking Download
When you expand a transaction that has been downloaded in banking, you are given the option to categorize or transfer the amount. The difference between categorize and transfer is that the former allows you to choose any account category, while the latter (transfer) only allows you to choose some accounts on the balance sheet. When in doubt, and for my clients that are not accountants, I suggest to always select categorize as this prevents the frustration of not seeing all the accounts on the dropdown list. Other than that there is no difference between the two.
