Tabling of the Quebec 2023-2024 budget: prudence and continuity

March 22, 2023

On March 21, 2023, Finance Minister Éric Girard presented Quebec’s 2023-2024 budget (available in French). This is the first exercise since last October’s election, and comes with no major surprises. In addition to fulfilling several campaign promises, including cutting income taxes, this budget is anchored in two major realities: the threat of an impending recession and an inflationary surge that is not yet under control.

In his approach, Minister Girard understands his role as a facilitator of the government’s agenda and, in this year’s budget, avoids encroaching on the responsibilities of his colleagues.

What the numbers say

State spending for 2023-2024 is estimated at $147.9 billion;
Revenue is projected at $147.7 billion;
Keeping the real gross domestic product (GDP) gap with Ontario below 10 per cent through 2026;
The projected deficit for 2023-2024 is $4.0 billion after a $2.3 billion payment to the Generations Fund and a $1.5 billion reserve for the Stabilization Fund;
The budget is still projected to be balanced in 2027-2028, while a current account surplus is now expected as early as 2025-2026.

Below are some highlights of interest to the auto care industry:

Income tax cuts

The minister’s budget for the 2023-24 fiscal year cuts taxes by one percentage point on the first two income tax brackets, saving an individual earner up to $814 a year. It is anticipated that Québec workers will start benefiting from the new rates in early July.

Economic development

To mitigate a potential recession, the government is increasing the Quebec Infrastructure Plan by $7.5 billion over 10 years. In addition, $615 million over six years will be used to address labour shortages by increasing support for the recruitment and francization of immigrants and improving short-term training programs.

Tire processing costs

Effective June 30, 2023, in order to ensure the sustainability of the program and to address the inequity between the cost of tire processing to motorists and the trucking industry, the specific fee on new highway vehicle tires, as currently applied, will be increased as follows:

$4.50 for new highway vehicle tires with a rim diameter of 24.5 inches (62.23 cm) or less and an overall diameter of 33 inches (83.82 cm) or less;
$6.00 for new on-road tires with a rim diameter of 62.23 cm (24.5 inches) or less and an overall diameter greater than 83.82 cm (33 inches) but not exceeding 123.19 cm (48.5 inches).

Minors in vocational or post-secondary education

In order to take into account the composition of certain households, in particular families with children in vocational training or post-secondary studies, and to ensure that they benefit from the new general tax reduction, the tax legislation will be amended to increase the amounts granted for the calculation of certain personal tax credits from the 2023 tax year.

On-the-job training (COUD program)

The Short Term Training Program (COUD), which gives priority to internships in occupations prioritized by the CPMT (Labour Market Partners Board), is designed to help companies facing recruitment difficulties. Through its work-study formula, the COUD offers companies the opportunity to train their employees on the job and rapidly improve their skills. To ensure the continuation of the program, the government is providing $100 million in 2022-2023 to renew the general retraining and skills upgrading component. This amount will go into the Workforce Skills Development and Recognition Fund, administered by the CPMT, and will fund new training projects until 2027-2028.

Improving vocational education

As part of the 2023-2024 budget, $200 million will be invested by 2027-2028 to modernize vocational education to make it more attractive and support the graduation of 30,000 additional students.

Note that on the right to repair—a key priority for AIA Canada—there was no reference in today’s budget. This was expected, as it is primarily an initiative from the Ministry of Justice. AIA Canada continues to work closely with the Minister’s office and the department on this file, and legislative advancements are projected for later this year.

AIA Canada will continue to advocate to government on issues of importance to the auto care industry.

For more information, please contact Alana Baker, AIA Canada’s Senior Director of Government Relations at alana.baker@aiacanada.com.