2025 Quebec Budget Highlights
On March 25, 2025, Quebec’s Finance Minister, Eric Girard, released the province’s 2025-2026 budget. We have highlighted selected tax measures that affect individuals and businesses in Quebec.
INDIVIDUALS
Personal Tax Rates
The budget did not propose any changes to personal income tax rates. The personal tax brackets continue to be indexed at an inflation rate of 2.85% for 2025.
| 2024 Taxable Income | 2025 Taxable Income | Tax Rate |
|---|---|---|
| $0 to $51,780 | $0 to $53,255 | 14.00% |
| $51,780 to $103,545 | $53,255 to $106,495 | 19.00% |
| $103,545 to $126,000 | $106,495 to $129,590 | 24.00% |
| Over $126,000 | Over $129,590 | 25.75% |
| Other/Interest/ Salary/Pension | Capital Gains | Eligible Canadian Dividends | Non-eligible Canadian Dividends |
|---|---|---|---|
| 53.31% | 26.65% | 40.11% | 48.70% |
Top rates apply to taxable income over $253,414 based on known federal and Quebec rates as of March 25, 2025
Personal Income Tax Measures
Simplifying the Tax System
- Harmonizing the rate of tax paid on insurance premiums with that of the Quebec sales tax (QST).
- The budget also announced adjusting the flow-through share regime to put an end to additional deductions and removing the additional capital gains exemption for certain resource properties.
Relaunching the Roulez Vert Program
- The Roulez vert program will once again be accessible as of April 1, 2025 for the purchase of electric vehicles.
-
The maximum rebates for the purchase of fully electric and plug-in hybrid
vehicles starting on January 1, 2025 will be as follows:
- $4,000 for new fully electric or fuel cell vehicles and $2,000 for new plug-in hybrid vehicles costing less than $65,000
- $2,000 for used fully electric vehicles and $1,000 for electric motorcycles.
- The rebates are to be reduced gradually in future years and will stop being offered on or after January 1, 2027.
Tax Assistance Measures for New Economic and Social Realities
- Reducing the age limit from 16 to 14 for the refundable tax credit for childcare expenses.
- Starting in 2026, only medical expenses for health services provided by practitioners who are members of a professional order in Quebec will be eligible for the two tax credits for medical expenses.
- Certain educational institutions which do not offer training aimed at employment will no longer be eligible for the non-refundable tax credit, with new designation and exclusion criteria to be introduced in 2026.
- Adjustments to the Cooperative Investment Plan (CIP), including reducing the rate of the CIP deduction from 125% to 100% for qualifying securities acquired the day after the budget speech.
Additional Personal Tax Measures
-
Strengthening fairness in the tax system, including:
- Transforming certain deductions into tax credits.
- Gradually restoring the balance between property tax and public utilities tax.
- Updating the additional registration fee for luxury vehicles.
- Eliminating certain inefficient or little-used tax expenditures.
- Harmonizing with the federal tax treatment of the capital gains inclusion rates which have been postponed to January 1, 2026. The Quebec government will closely monitor any potential federal changes and take into considerations the best interests of Quebec.
BUSINESSES
The budget did not propose any changes to Quebec corporate income tax rates or the small business deduction calculation.
| Income Type | Quebec Rate | Federal Rate | Combined Rates Calendar 2025 |
|---|---|---|---|
| General corporate income | 11.50% | 15.00% | 26.50% |
| Small business income – federal and Quebec income eligible for the small business deduction | 3.20% | 9.00% | 12.20% |
| Small business income – only federal income eligible for the small business deduction | 11.50% | 9.00% | 20.50% |
| CCPC* investment income | 11.50% | 38.67% | 50.17% |
| Non-CCPC investment income | 11.50% | 15.00% | 26.50% |
| Manufacturing & processing income | 11.50% | 15.00% | 26.50% |
*Canadian-controlled private corporation
Based on known federal and Quebec rates at March 25, 2025
Business Income Tax Measures
Optimizing tax assistance measures for business
- Targeting higher value-added business in the IT sector by replacing the current CDAE with the tax credit for the development of e-business integrating artificial intelligence solutions.
Introducing a New Innovation Tax Assistance System
- A new innovation tax assistance system will be introduced, with the credit for research, innovation and commercialization (CIRC) that will replace eight currently available tax measures, including R&D tax credits.
Refer to the 2025 Quebec Budget here for further details.
This has been prepared by the Total Wealth Solutions Group of Raymond James Ltd., (RJL). Statistics and factual data and other information are from sources RJL believes to be reliable but their accuracy cannot be guaranteed. It is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities nor is it meant to replace legal, accounting, taxation or other professional advice. We are not tax advisors and we recommend that clients seek independent advice from a professional advisor on tax-related matters. The information is furnished on the basis and understanding that RJL is to be under no liability whatsoever in respect thereof. This is intended for distribution only in those jurisdictions where RJL and the author are registered. Securities-related products and services are offered through Raymond James Ltd., Member - Canadian Investor Protection Fund. Insurance products and services are offered through Raymond James Financial Planning Ltd., which is not a Member - Canadian Investor Protection Fund.
