Ministère des Finances : 2002




Press releases 2002-2003 BUDGET Vigorous support for businesses in all regions Québec City, November 1, 2001 — The 2002-2003 Budget tabled today by Deputy Prime Minister and Minister of State for the Economy and Finance Pauline Marois contains a number of support measures to see businesses through this more difficult period and encourage them to accelerate their investments. "Our government is convinced that businesses constitute the driving force behind job creation and wealth. Over the years, we have introduced highly effective support measures. Today, we are reinforcing and adapting these measures to ensure they meet the needs of Québec businesses even more effectively", Ms. Marois said. Immediate assistance for SMEs: $525 million in additional liquidity To enable SMEs whose paid-up capital does not exceed $15 million to benefit from additional liquidity, the government is granting them a six-month extension for paying their income tax and tax on capital instalments for the last quarter of 2001. This deferral, which had already been granted for October, will be extended to include the months of November and December. In addition, as of January 1, 2002, businesses whose monthly source deductions do not exceed $1 000 will be able to remit the amounts they must deduct at source on a quarterly basis. It is estimated that, as a result of this measure, small businesses will henceforth be dispensed from filing some 800 000 forms. These two measures will provide SMEs with $525 million in additional liquidity. La Financière du Québec, a corporation devoted to SME financing To better meet the financing needs of SMEs, the government is creating a new corporation precisely for this purpose. La Financière du Québec will replace Garantie Québec, and it will be able to grant loans to businesses, rather than just loan guarantees. It will be entrusted with the important mandate of providing working capital assistance to businesses experiencing temporary difficulties. Its activities will thus ensure that businesses facing liquidity problems on account of the economic situation will be able to maintain their operations and jobs. It will be able to grant up to $100 million in loans or loan guarantees between now and March 31, 2003. La Financière du Québec will also be able to make loans to fledgling businesses that are having difficulty obtaining funding because of the current situation. A loan envelope of $25 million is being made available for this purpose, until March 31, 2003. This corporation will also be able to provide financing adapted to the needs of small cooperatives and social economy businesses. The objective is to grant them $15 million in capitalization loans and other financial products. Three initiatives to promote investment starting now To facilitate the funding of major projects and improve the competitiveness of the corporate taxation system, Ms. Marois has announced the following measures: enhancement of the FAIRE program The government is extending the FAIRE program until 2005 and granting it additional funding of $150 million for the current year and $200 million for 2002-2003, bringing the program envelope for these years to $400 million and $300 million respectively. In addition to adjusting the terms and conditions of the program to bring it into line with other measures, the government is lowering the project eligibility threshold by one half. Projects that total over $5 million or create at least 50 jobs will henceforth be eligible under the program. New wind-power projects will be eligible as well. Gradual reduction of the tax on capital The tax on capital will be reduced by over 50% by 2007. The reduction will be faster for SMEs given that 60% of them will be exempt from the tax on capital as of January 2003. In addition, the exemption threshold will be raised gradually, with the result that by 2006, 210 000 businesses, or 75% of all firms, will no longer pay the tax on capital. More support for the new economy Programs targeting the new economy are being extended until 2013 and tax assistance to e-commerce businesses will be broadened to include a larger territory. "As of now, these measures send a very clear message to investors: the Québec government is making specific commitments to maintain the competitiveness of its tax system applicable to businesses. After having reduced the payroll tax, it is now cutting the tax on capital, which will significantly reduce fixed charges", Ms. Marois added An additional effort for the resource regions In addition to having access to support programs as a whole, businesses in the resource regions will also benefit from the improvement of measures that target them specifically. The government is doubling the size of manufacturing SMEs eligible for the 10-year tax holiday. The latter will now apply to businesses whose paid-up capital is less than $30 million, and not $15 million, as initially provided for. Changes are being made to the refundable tax credit for processing activities and to the tax credits relating to the Vallée de l’aluminium and the Gaspésie- Îles-de-la-Madeleine region. In addition, the formula for calculating the tax credit is being eased temporarily: businesses that maintain their employment level will be eligible for tax assistance applicable to 10% of their existing jobs. The objective of this additional assistance is to foster jobs in these difficult times. The refundable tax credit for mining exploration is also being broadened to include the cut-stone sector, and SOQUEM will have an envelope of $12 million for carrying out mining exploration work with its partners. - 30 - Source: Nicole Bastien Press Officer Office of the Deputy Prime Minister and Minister of State for the Economy and Finance Tel.: (418) 643-5270 nicole.bastien@finances.gouv.qc.ca Back to press releases menu