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Press
Release No. 3
2004-2005
Budget Speech
A $1-billion reduction in the tax burden
“If the future is to live up to our expectations,
we must ensure that the tax burden is fairly distributed
and encourages each and every one of us to fully participate
in fostering wealth creation. That is why our government
has pledged to reduce Quebecers’ income tax.”
Québec, March 30, 2004 – “With
this Budget, we are keeping our promise. I am announcing today
that we will put $1 billion back into taxpayers’
pockets,” declared Minister of Finance Yves Séguin
in his 2004-2005 Budget Speech.
This
income tax reduction breaks down as follows:
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$550 million through the Child Assistance measure;
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$240 million in the form of a work premium;
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$220 million in tax breaks for Quebecers through the simplification
of the tax system.
Support
for families
With
the introduction of the new Child Assistance measure, families
will benefit from over half of the reduction in the tax burden,
i.e. $550 million. Mr. Séguin announced that thanks
to this measure, families will receive up to $2 000 per
year for one child, $3 000 for two children, $4 000
for three children and $5 500 for four children, with
the latter amount being increased by $1 500 for every
additional child. Child Assistance will be available to all
families with children under 18, but will be particularly
generous for low- and middle-income families.
This
measure, which comes into force on January 1, 2005, will replace
the family allowance, the tax reduction for families and the
tax credit respecting dependent children with universal, more
generous relief for families.
Furthermore,
as of midnight tonight, parents with young children will no
longer pay Québec sales tax on diapers, baby bottles
or items used for breast feeding.
“Balancing family and professional obligations is not
just a daily challenge for most parents; all too often, it
is also a real headache. The government wants to give all
parents the means to use the child-care services that suit
them. Currently, parents who have their children looked after
in the private network or at home often have to wait until
after the end of the year to receive their tax assistance.
This Budget wants to make their lives easier,” stated
the Finance Minister.
The
2004-2005 Budget provides for the payment of the tax credit
for child-care expenses by cheque four times a year as of
January 2005. This credit, worth up to $5 250 per child,
will be paid at the start of each quarter.
Work
Premium
The
2004-2005 Budget allocates $240 million, in the form
of a work premium, to recognize and reward the efforts of
500 000 low- and middle-income people and families.
Concretely,
it can mean up to $2 800 more a year for a couple with
children and an income of $14 800, for a 25% increase
in income. This premium will be of special benefit to young
families. As in the case of the Child Assistance measure,
the Work Premium will be paid to them by cheque four times
a year.
In
addition, until today, persons living alone and low-income
households without children did not receive any government
assistance upon entering the job market. With this new premium,
the work efforts of 335 000 households will be rewarded. Thus,
an independent adult can receive a premium of up to $511 a
year, while a household without children can receive up to
$784.
General
tax relief
Lastly,
Québec taxpayers will benefit from $220 million
in tax cuts thanks to the simplification of our tax system.
In
the 2004-2005 Budget Speech, the Finance Minister announced
the amalgamation of the general and simplified tax systems
as of January 1, 2005.
The
reform is explained in detail in the document Additional
Information on the Budgetary Measures.
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