Big victory for the FTQ and the FTQ Solidarity Fund. They managed to push back the Legault government and its Finance Minister Eric Girard on their decision to prevent taxpayers with “high incomes” of $112,655 and above from benefiting from the attractive tax credits when investing in labor from this year 2024' Medium.
In fact, Finance Minister Eric Girard's office has just announced that the government is postponing for three years the entry into force of this new tax regime, which was intended to prevent “rich” taxpayers in Quebec from taking advantage of the tax relief benefits given to shareholders starting this year of the FTQ Fund and the Fondaction de la CSN.
While Quebec wanted to cut its credit by 15%, Ottawa had to follow suit and also cut its credit by 15%. These cuts will ultimately not take effect until 2027, giving “high-income” taxpayers three more years to invest up to $5,000 per year in employee funds and benefit from the 30% tax credits (up to $1,500). dollars/year).
- Listen to the economy part with Michel Girard above QUB :
What a beautiful coincidence
You should know that on January 24, the two most senior leaders of the FTQ trade union center, President Magali Picard and Secretary General Denis Bolduc, registered as lobbyists to meet François Legault, Eric Girard and the members of their respective companies. With what lobbying mandate? “Removal of the taxable income cap ($112,656) for eligibility for the 15% provincial tax credit for employee funds,” says the Carrefour Lobby Québec website.
Why did the Legault government want to prohibit high-income taxpayers in Quebec from benefiting from 30% tax credits on RRSP contributions from the Fonds FTQ and Fondaction CSN?
“This change, effective from tax year 2024, will provide access to the tax credit to approximately 60,000 savers whose taxable income is less than or equal to the threshold for the final taxable income bracket,” we explained in Treasury Secretary Eric Girard's March 2023 budget.
Since there are annual caps on share subscriptions in the two workers' funds, the Legault government assumed that by preventing the “rich” from investing in them with the intention of benefiting from tax credits, enough space would be freed up for 60,000 new savers with modest incomes Provide the opportunity to invest in employee funds.
According to the latest tax statistics (year 2020) published by the Quebec Ministry of Finance, this year around 86,200 taxpayers with incomes of $100,000 or more had invested part of their savings in employee funds, i.e. about $355 million. I calculated that they had shared $53.2 million in provincial tax credits and of course the same amount in federal tax credits, for a total of $106 million in savings. Taxes on their contributions to employee funds.
- Listen to the economy part with Michel Girard above QUB :
Why is Quebec moving backwards?
The senior leaders of the FTQ and the FTQ Solidarity Fund made an offer that François Legault and his financier Eric Girard could not refuse!
What offer? The FTQ Solidarity Fund will invest heavily in housing if the government postpones for several years the entry into force of the regulation that prohibits high-income taxpayers from redeeming tax credits from employees' funds.
Deal done! As evidence: “In order to allow employee funds to attract more capital to increase their investments, especially in housing, the entry into force of this regulation is postponed for three years,” says the press release from the office of Minister Eric Girard.
And Janie C. Béïque, President and CEO of the Fonds de solidarité FTQ, added regarding the three-year postponement of the rule prohibiting the rich from investing in the fund: “The fund will thus be able to transfer its shares to the benefit of to increase socio-economic development, particularly by investing millions of dollars more this year in the construction of new housing in Quebec. »
In fact, we are talking about an investment by the Fonds de solidarité FTQ of at least $100 million in the construction of new housing.
This shows that the contribution of the “rich” to workers’ funds makes it possible to invest meaningfully in Quebec’s economy.