Quebec Budget 2025-2026: Your Wallet’s Moves
- A look at the major tax and financial adjustments outlined in the latest Quebec budget.
- The tax on automotive and home insurance premiums will increase from 9% to 9.975% starting January 1, 2027.
- For example, a household spending $4,000 annually on these insurance premiums will see an increase of $39 per year.
Quebec Budget 2025: Key Changes
Table of Contents
- Quebec Budget 2025: Key Changes
- Quebec Budget 2025: Key Changes
- Key Questions and Answers About the Quebec Budget 2025
- what are the major tax changes in the quebec budget 2025?
- How will the insurance tax change affect me?
- What’s changing with the childcare Tax Credit?
- How is the definition of a luxury vehicle changing?
- What is the tax shield and why is it being abolished?
- Will I have to pay a new tax for owning an electric vehicle?
- How does the budget protect workers injured on the job?
- Summary of Key Changes
- Key Questions and Answers About the Quebec Budget 2025
A look at the major tax and financial adjustments outlined in the latest Quebec budget.
Published: March 25, 2025
insurance Tax Adjustment
The tax on automotive and home insurance premiums will increase from 9% to 9.975% starting January 1, 2027. This adjustment aligns the insurance premium tax with the Quebec sales tax (TVQ) rate.
For example, a household spending $4,000 annually on these insurance premiums will see an increase of $39 per year.
Childcare Tax Credit eligibility
Effective January 1, 2026, the reimbursable tax credit for childcare costs will no longer apply to children aged 15 and 16.The eligible age will be reduced to 14 years. This change aims to refocus tax assistance on families with younger children.
There is no age limit for children with serious disabilities.
Luxury Vehicle Redefinition
The threshold for defining a luxury vehicle, subject to an additional fee to finance transport networks, will increase from $40,000 to $62,500, effective january 1, 2027. this adjustment reflects the rising cost of vehicles.
Electric vehicles, previously partially exempt, are now included.
Tax Shield Abolishment
The tax shield, a tax credit for individuals whose increased income resulted in a loss of government aid, will be abolished in 2026. The tax shield aimed to compensate for these losses.
The average tax credit received was $244. Most affected individuals are expected to be impacted for onyl one year.
Electric Vehicle Contribution
A new annual contribution for drivers of electric and rechargeable hybrid vehicles will be introduced on January 1, 2027, to support road network financing. This measure addresses declining fuel tax revenues and aims to increase equity among motorists.
Free access to toll bridges and crossings for vehicles with green licence plates will end on April 1, 2027.
Protection for Victims of Work Accidents
The budget includes provisions to protect the retirement annuity of workers injured on the job. The annuity amount will remain at the same level as if the accident had not occurred.
This measure ensures that reduced income due to work-related injuries does not negatively impact retirement pensions.
Quebec Budget 2025: Key Changes
A straightforward guide to the major financial changes announced in the Quebec budget.
Published: March 25, 2025
Key Questions and Answers About the Quebec Budget 2025
what are the major tax changes in the quebec budget 2025?
The Quebec Budget 2025 introduces several key tax adjustments affecting individuals and businesses. These changes include modifications to insurance tax, childcare tax credits, luxury vehicle definitions, and the introduction of a new electric vehicle contribution.
How will the insurance tax change affect me?
Starting January 1, 2027, the tax on automotive and home insurance premiums will increase from 9% to 9.975%. This adjustment aligns the insurance premium tax with the Quebec sales tax (TVQ) rate.
- Impact: A household spending $4,000 annually on insurance premiums will see an increase of $39 per year.
- Financial Impact: This change is estimated to generate an additional $996.2 million by 2030.
What’s changing with the childcare Tax Credit?
Effective January 1, 2026, the reimbursable tax credit for childcare costs will no longer apply to children aged 15 and 16. The eligible age will be reduced to 14 years. This change aims to focus tax assistance on families with younger children. There is no age limit for children with serious disabilities.
- Financial Impact: The change in childcare tax credit eligibility is estimated to generate an additional $42 million by 2030.
How is the definition of a luxury vehicle changing?
The threshold for defining a luxury vehicle, which is subject to an additional fee to finance transport networks, will increase from $40,000 to $62,500, effective January 1, 2027. this adjustment reflects the rising cost of vehicles. Electric vehicles,previously partially exempt,are now included.
- Example: An owner of a vehicle worth $70,000 will now pay an additional registration fee of $75 instead of $300.
What is the tax shield and why is it being abolished?
The tax shield, a tax credit for individuals whose increased income resulted in a loss of government aid, will be abolished in 2026. The tax shield aimed to compensate for these losses. Approximately 140,000 people are affected annually.
- Impact: The average tax credit received was $244. Most affected individuals are expected to be impacted for only one year.
Will I have to pay a new tax for owning an electric vehicle?
Yes, a new annual contribution for drivers of electric and rechargeable hybrid vehicles will be introduced on January 1, 2027, to support road network financing. This measure addresses declining fuel tax revenues and aims to increase equity among motorists.
- Contribution Amounts: $125 for electric vehicles and $62.50 for rechargeable hybrid vehicles.
- Free access to toll bridges and crossings for vehicles with green license plates will end on April 1, 2027.
How does the budget protect workers injured on the job?
The budget includes provisions to protect the retirement annuity of workers injured on the job. The annuity amount will remain at the same level as if the accident had not occurred. This measure ensures that reduced income due to work-related injuries does not negatively impact retirement pensions. A worker whose income was reduced due to a work injury could see a difference of $2,181 per year.
Summary of Key Changes
Here’s a quick overview of the key changes outlined in the Quebec Budget 2025:
| Change | Effective Date | Details |
|---|---|---|
| Insurance Tax Increase | January 1, 2027 | Tax on automotive and home insurance premiums increases from 9% to 9.975%. |
| Childcare Tax Credit | January 1, 2026 | Eligibility reduced to children aged 14 and under (with exceptions for disabilities). |
| Luxury Vehicle Definition | January 1, 2027 | Threshold increased from $40,000 to $62,500; electric vehicles included. |
| Tax Shield Abolishment | 2026 | Tax credit for individuals with increased income and reduced government aid is removed. |
| Electric Vehicle Contribution | January 1, 2027 | Annual contribution of $125 (electric) and $62.50 (rechargeable hybrid) for road network financing. |
| Work Accident Protection | Immediate | Protection for retirement annuities of workers injured on the job. |