Taxpayers who earn more than $112,000 can no longer benefit from the tax credit linked to the Fonds de solidarité FTQ and Fondaction CSN, Treasury Secretary Eric Girard ordered on Tuesday.
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This change, which will take effect starting in the 2024 tax year, will allow approximately 60,000 more Quebecers to invest in these worker-sponsored funds, which offer a 30% tax credit, Ms. Girard said at a news conference.
Demand for these funds outstrips their ability to invest in Quebec companies. They therefore have to turn away many savers each year, a situation that Quebec wants to change.
- Listen to the interview with Charles Milliard, President and CEO of the Federation of Quebec Chambers of Commerce on QUB radio:
stricter rules
The government is also tightening the investment standard for the FTQ, Fondaction and Capital régional et coopératif Desjardins funds. They will no longer be able to invest in companies outside of Quebec, even if they promise to generate significant spin-offs in the province.
Last year, for example, the fund FTQ caused a stir when it invested in the Ontario company that had acquired Quebec retailer Club Piscine.
On the other hand, the three tax-deferred funds can still invest in non-Quebec funds that invest here.
More than a million Quebecers are shareholders in these funds, which received more than $1.5 billion in contributions in 2021.
Quebec also announced two other changes on Tuesday:
- The minimum holding period for fund FTQ and Fondaction shares will be gradually extended from two to five years.
- The objectives of these funds should focus more on business development than job creation.
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