Quebec budget proposes further changes to health taxes

Government speeding up plan to eliminate mandatory health contribution, making further cuts to HSF contribution rates
By Sheila Brawn
|Canadian Payroll Reporter|Last Updated: 05/02/2016

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 personal health contribution.

Quebec Finance Minister Carlos Leitão announced the rate reductions when he tabled the province’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 deductions.

The government plans to lower the rates for the personal health contribution in 2016 and 2017 and to eliminate premiums altogether in 2018. The proposed 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 government would gradually reduce and eliminate the health contribution between 2017 and 2019.