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Canadian HR Reporter, a Thomson Reuters business 2016
News CPR
|
May 2016
Quebec budget proposes
further changes to health taxes
Government speeding up plan to eliminate mandatory health
contribution, making further cuts to HSF contribution rates
see BUSINESS page 8
BY SHEILA BRAWN
EMPLOYERS with Quebec
payrolls will have to implement
changes to provincial income tax
tables and formulas for July 1 to
incorporate newly announced
rate cuts for the mandatory per-
sonal health contribution.
Quebec Finance Minister Car-
los Leitão announced the rate re-
ductions when he tabled the pro-
vince's 2016-17 budget on March
17. The budget also proposes to
reduce the rates some employers
pay for Quebec's Health Services
Fund (HSF) and to revise some of
the tax credits payroll uses when
calculating income tax source de-
ductions.
The government plans to
lower the rates for the personal
health contribution in 2016 and
2017 and to eliminate premiums
altogether in 2018. The pro-
posed measure would speed up a
planned phase-out of the health
contribution announced in last
year's budget. In the 2015-16
budget, Leitão said the govern-
ment would gradually reduce
and eliminate the health contri-
bution between 2017 and 2019.
Currently, provincial resi-
dents 18 and over pay the contri-
bution (unless exempted) if their
income exceeds $18,570 in 2016.
Employees pay the contribution
through income tax source de-
ductions at work.
The proposed changes would
lower the maximum annual con-
tribution to $50 from $100 for in-
dividuals whose annual income
is between $18,570 and $41,265.
For individuals whose annual
income is between $41,265 and
$134,095, the maximum annual
contribution would be reduced
from to $175 from $200. The
max yearly contribution would
remain $1,000 for those with in-
comes exceeding $134,095.
The rates would be retroactive
to Jan. 1, but Revenu Québec
would not implement them until
July 1.
For 2017, the budget proposes
to exempt net incomes less than
$41,265 (all income ranges would
be adjusted for indexation). For
income between $41,265 and
$134,095, the max annual contri-
bution would be reduced to $70.
For income exceeding $134,095,
the max contribution would drop
from to $800 from $1,000. As of
Jan. 1, 2018, no one would pay the
health contribution.
Beginning next year, the
budget also proposes to gradual-
ly reduce the HSF contribution
rate over five years for all small
and medium-size businesses
(SMBs) whose total annual pay-
roll is less than $5 million. Em-
ployers in Quebec are required
to pay into the fund to help
