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Changes have been made concerning:

• the period during which applications can be made for corporation qualification certificates; and
• the nature of the expenses eligible for tax assistance.

Extension of the time limit for submitting an application for a corporation qualification certificate

This time limit is extended by five years so that an application for a corporation qualification certificate can be submitted to the Minister of Finance no later than December 31, 2022.

Addition to eligible expenses

The following two new eligible expenses have been added:

• fees relating to the constitution of a prospectus required by a recognized regulatory or self-regulatory organization of a financial market; and
• fees paid to a compliance consultant to ensure compliance with the requirements of a recognized regulatory or self-regulatory organization of a financial market.

These expenses must be directly attributable to the eligible activities of the corporation in order to be eligible.

These changes apply in respect of expenses incurred by a qualified corporation for a taxation year included, in whole or in part, in the period of validity of its corporation qualification certificate and after March 28, 2017.

For more information, see pages A.49 to A.51 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Changes have been made concerning:

• the period during which applications can be made for corporation qualification certificates; and
• the nature of the expenses eligible for tax assistance.

Extension of the time limit for submitting an application for a corporation qualification certificate

This time limit is extended by five years so that an application for a corporation qualification certificate can be submitted to the Minister of Finance no later than December 31, 2022.

Addition to eligible expenses

The following two new eligible expenses have been added:

• fees relating to the constitution of a prospectus required by a recognized regulatory or self-regulatory organization of a financial market; and
• fees paid to a compliance consultant to ensure compliance with the requirements of a recognized regulatory or self-regulatory organization of a financial market.

These expenses must be directly attributable to the eligible activities of the corporation in order to be eligible.

These changes apply in respect of expenses incurred by a qualified corporation for a taxation year included, in whole or in part, in the period of validity of its corporation qualification certificate and after March 28, 2017.

For more information, see pages A.49 to A.51 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Changes have been made concerning:

• the period during which applications can be made for corporation qualification certificates; and
• the nature of the expenses eligible for tax assistance.

Extension of the time limit for submitting an application for a corporation qualification certificate

This time limit is extended by five years so that an application for a corporation qualification certificate can be submitted to the Minister of Finance no later than December 31, 2022.

Addition to eligible expenses

The following two new eligible expenses have been added:

• fees relating to the constitution of a prospectus required by a recognized regulatory or self-regulatory organization of a financial market; and
• fees paid to a compliance consultant to ensure compliance with the requirements of a recognized regulatory or self-regulatory organization of a financial market.

These expenses must be directly attributable to the eligible activities of the corporation in order to be eligible.

These changes apply in respect of expenses incurred by a qualified corporation for a taxation year included, in whole or in part, in the period of validity of its corporation qualification certificate and after March 28, 2017.

For more information, see pages A.49 to A.51 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Changes have been made concerning: 

• the period during which applications can be made for corporation qualification certificates; and
• the nature of the expenses eligible for tax assistance.

Extension of the time limit for submitting an application for a corporation qualification certificate

This time limit is extended by five years so that an application for a corporation qualification certificate can be submitted to the Minister of Finance no later than December 31, 2022.

Addition to eligible expenses

The following two new eligible expenses have been added: 

• fees relating to the constitution of a prospectus required by a recognized regulatory or self-regulatory organization of a financial market; and
• fees paid to a compliance consultant to ensure compliance with the requirements of a recognized regulatory or self-regulatory organization of a financial market.

These expenses must be directly attributable to the eligible activities of the corporation in order to be eligible.

These changes apply in respect of expenses incurred by a qualified corporation for a taxation year included, in whole or in part, in the period of validity of its corporation qualification certificate and after March 28, 2017.

For more information, see pages A.49 to A.51 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

To recognize that the cost of living in certain areas is higher than elsewhere because of their remote location, the tax system grants residents of these areas a special deduction in the calculation of their income.

The amount of the deduction an individual can claim depends on where the individual lives. The deduction is granted in full to residents of northern zones but is reduced by 50% for residents of intermediate zones.

The Îles-de-la-Madeleine are currently considered an intermediate zone. As of the 2017 taxation year, they will be considered a northern zone.

For more information, see pages A.22 and A.23 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

To recognize that the cost of living in certain areas is higher than elsewhere because of their remote location, the tax system grants residents of these areas a special deduction in the calculation of their income.

The amount of the deduction an individual can claim depends on where the individual lives. The deduction is granted in full to residents of northern zones but is reduced by 50% for residents of intermediate zones.

The Îles-de-la-Madeleine are currently considered an intermediate zone. As of the 2017 taxation year, they will be considered a northern zone.

For more information, see pages A.22 and A.23 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

To recognize that the cost of living in certain areas is higher than elsewhere because of their remote location, the tax system grants residents of these areas a special deduction in the calculation of their income.

The amount of the deduction an individual can claim depends on where the individual lives. The deduction is granted in full to residents of northern zones but is reduced by 50% for residents of intermediate zones.

The Îles-de-la-Madeleine are currently considered an intermediate zone. As of the 2017 taxation year, they will be considered a northern zone.

For more information, see pages A.22 and A.23 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

To recognize that the cost of living in certain areas is higher than elsewhere because of their remote location, the tax system grants residents of these areas a special deduction in the calculation of their income.

The amount of the deduction an individual can claim depends on where the individual lives. The deduction is granted in full to residents of northern zones but is reduced by 50% for residents of intermediate zones.

The Îles-de-la-Madeleine are currently considered an intermediate zone. As of the 2017 taxation year, they will be considered a northern zone.

For more information, see pages A.22 and A.23 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

To recognize that the cost of living in certain areas is higher than elsewhere because of their remote location, the tax system grants residents of these areas a special deduction in the calculation of their income.

The amount of the deduction an individual can claim depends on where the individual lives. The deduction is granted in full to residents of northern zones but is reduced by 50% for residents of intermediate zones.

The Îles-de-la-Madeleine are currently considered an intermediate zone. As of the 2017 taxation year, they will be considered a northern zone.

For more information, see pages A.22 and A.23 of the Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Allowance for community consultation

The Mining Tax Act will be amended to introduce an allowance for community consultations. This allowance will be taken into account in calculating the operator's annual profit or annual loss.

The amount that an operator may deduct as an allowance for community consultations may not exceed the balance of the operator's cumulative consultation expense account at the end of a given fiscal year, on the same basis as the pre-production development allowance.

For this purpose, a cumulative expense account for community consultations will be created. The cumulative consultation expenses will correspond to 50% of the aggregate of the total expenses for community consultations incurred by the operator. Any government assistance relating to eligible expenses that is received, receivable or repaid will be treated according to the same principles that currently apply to the pre-production development allowance.

The community consultation expenses covered by this allowance will be of the same type as those covered by the concept of community consultation expenses found in the definition of “Canadian exploration expense” in the Income Tax Act. The following expenses, however, cannot be considered for the allowance: expenses that may be qualified as exploration expenses and expenses that may reasonably be considered to be attributable to a mine which has come into production in reasonable commercial quantities.

The allowance for community consultations will apply to an operator's fiscal year ending after March 28, 2017, in respect of consultation expenses incurred after that day.

Refundable duties credit for losses

Changes will be made to the refundable duties credit for losses of an operator to take into account the introduction of the allowance for community consultations.

For more information, see pages A.61 to A.64 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Allowance for community consultation

The Mining Tax Act will be amended to introduce an allowance for community consultations. This allowance will be taken into account in calculating the operator's annual profit or annual loss.

The amount that an operator may deduct as an allowance for community consultations may not exceed the balance of the operator's cumulative consultation expense account at the end of a given fiscal year, on the same basis as the pre-production development allowance.

For this purpose, a cumulative expense account for community consultations will be created. The cumulative consultation expenses will correspond to 50% of the aggregate of the total expenses for community consultations incurred by the operator. Any government assistance relating to eligible expenses that is received, receivable or repaid will be treated according to the same principles that currently apply to the pre-production development allowance.

The community consultation expenses covered by this allowance will be of the same type as those covered by the concept of community consultation expenses found in the definition of “Canadian exploration expense” in the Income Tax Act. The following expenses, however, cannot be considered for the allowance: expenses that may be qualified as exploration expenses and expenses that may reasonably be considered to be attributable to a mine which has come into production in reasonable commercial quantities.

The allowance for community consultations will apply to an operator's fiscal year ending after March 28, 2017, in respect of consultation expenses incurred after that day.

Refundable duties credit for losses

Changes will be made to the refundable duties credit for losses of an operator to take into account the introduction of the allowance for community consultations.

For more information, see pages A.61 to A.64 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Allowance for community consultation

The Mining Tax Act will be amended to introduce an allowance for community consultations. This allowance will be taken into account in calculating the operator's annual profit or annual loss.

The amount that an operator may deduct as an allowance for community consultations may not exceed the balance of the operator's cumulative consultation expense account at the end of a given fiscal year, on the same basis as the pre-production development allowance.

For this purpose, a cumulative expense account for community consultations will be created. The cumulative consultation expenses will correspond to 50% of the aggregate of the total expenses for community consultations incurred by the operator. Any government assistance relating to eligible expenses that is received, receivable or repaid will be treated according to the same principles that currently apply to the pre-production development allowance.

The community consultation expenses covered by this allowance will be of the same type as those covered by the concept of community consultation expenses found in the definition of “Canadian exploration expense” in the Income Tax Act. The following expenses, however, cannot be considered for the allowance: expenses that may be qualified as exploration expenses and expenses that may reasonably be considered to be attributable to a mine which has come into production in reasonable commercial quantities.

The allowance for community consultations will apply to an operator's fiscal year ending after March 28, 2017, in respect of consultation expenses incurred after that day.

Refundable duties credit for losses

Changes will be made to the refundable duties credit for losses of an operator to take into account the introduction of the allowance for community consultations.

For more information, see pages A.61 to A.64 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Allowance for community consultation

The Mining Tax Act will be amended to introduce an allowance for community consultations. This allowance will be taken into account in calculating the operator's annual profit or annual loss.

The amount that an operator may deduct as an allowance for community consultations may not exceed the balance of the operator's cumulative consultation expense account at the end of a given fiscal year, on the same basis as the pre-production development allowance.

For this purpose, a cumulative expense account for community consultations will be created. The cumulative consultation expenses will correspond to 50% of the aggregate of the total expenses for community consultations incurred by the operator. Any government assistance relating to eligible expenses that is received, receivable or repaid will be treated according to the same principles that currently apply to the pre-production development allowance.

The community consultation expenses covered by this allowance will be of the same type as those covered by the concept of community consultation expenses found in the definition of “Canadian exploration expense” in the Income Tax Act. The following expenses, however, cannot be considered for the allowance: expenses that may be qualified as exploration expenses and expenses that may reasonably be considered to be attributable to a mine which has come into production in reasonable commercial quantities.

The allowance for community consultations will apply to an operator's fiscal year ending after March 28, 2017, in respect of consultation expenses incurred after that day.

Refundable duties credit for losses

Changes will be made to the refundable duties credit for losses of an operator to take into account the introduction of the allowance for community consultations.

For more information, see pages A.61 to A.64 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Allowance for community consultation

The Mining Tax Act will be amended to introduce an allowance for community consultations. This allowance will be taken into account in calculating the operator's annual profit or annual loss.

The amount that an operator may deduct as an allowance for community consultations may not exceed the balance of the operator's cumulative consultation expense account at the end of a given fiscal year, on the same basis as the pre-production development allowance.

For this purpose, a cumulative expense account for community consultations will be created. The cumulative consultation expenses will correspond to 50% of the aggregate of the total expenses for community consultations incurred by the operator. Any government assistance relating to eligible expenses that is received, receivable or repaid will be treated according to the same principles that currently apply to the pre-production development allowance.

The community consultation expenses covered by this allowance will be of the same type as those covered by the concept of community consultation expenses found in the definition of “Canadian exploration expense” in the Income Tax Act. The following expenses, however, cannot be considered for the allowance: expenses that may be qualified as exploration expenses and expenses that may reasonably be considered to be attributable to a mine which has come into production in reasonable commercial quantities. 

The allowance for community consultations will apply to an operator's fiscal year ending after March 28, 2017, in respect of consultation expenses incurred after that day.

Refundable duties credit for losses

Changes will be made to the refundable duties credit for losses of an operator to take into account the introduction of the allowance for community consultations.

For more information, see pages A.61 to A.64 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

Under the Québec tax system, individuals can claim refundable tax credits that reduce—and in some cases even cancel—their income tax payable. These include the basic tax credit granted to all individuals (except trusts) as well as a variety of other credits individuals can claim depending on their particular situation.

The basic tax credit is calculated by multiplying the basic personal amount for the year by 20%, the same rate used to convert the following amounts into tax credits:

• the age amount, the amount for a person living alone and the amount for retirement income;
• the amount for dependants and the amount transferred by a child 18 or over enrolled in post-secondary studies;
• the amount for a severe and prolonged impairment in mental or physical functions.

Beginning with the 2017 taxation year, the conversion rate will be reduced from 20% to 16%. However, there will be no corresponding increase in income tax because:

• the basic personal amount has been increased such that income tax is actually reduced;
• the other amounts mentioned above have also been increased.

The basic personal amount has been increased from $11,635 to $14,890. The basic tax credit has therefore been increased from $2,327 ($11,635 × 20%) to $2,382 ($14,890 × 16%), resulting in a $55 reduction in income tax.

Indexation of the basic personal amount and the other amounts will resume in 2018.

Source deductions and instalment payments

For 2017, the income tax reduction will be applied when individuals file their personal income tax returns.

Beginning in 2018, it will be reflected in the source deductions made on salaries and wages and other amounts (such as retirement benefits).

Individuals who are required to pay their income tax in instalments can adjust, as per usual, any instalment payment due after March 15, 2017, in order to take into account the general tax reduction.

For more information, see pages A.4 to A.14 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

Under the Québec tax system, individuals can claim refundable tax credits that reduce—and in some cases even cancel—their income tax payable. These include the basic tax credit granted to all individuals (except trusts) as well as a variety of other credits individuals can claim depending on their particular situation.

The basic tax credit is calculated by multiplying the basic personal amount for the year by 20%, the same rate used to convert the following amounts into tax credits:

• the age amount, the amount for a person living alone and the amount for retirement income;
• the amount for dependants and the amount transferred by a child 18 or over enrolled in post-secondary studies;
• the amount for a severe and prolonged impairment in mental or physical functions.

Beginning with the 2017 taxation year, the conversion rate will be reduced from 20% to 16%. However, there will be no corresponding increase in income tax because:

• the basic personal amount has been increased such that income tax is actually reduced;
• the other amounts mentioned above have also been increased.

The basic personal amount has been increased from $11,635 to $14,890. The basic tax credit has therefore been increased from $2,327 ($11,635 × 20%) to $2,382 ($14,890 × 16%), resulting in a $55 reduction in income tax.

Indexation of the basic personal amount and the other amounts will resume in 2018.

Source deductions and instalment payments

For 2017, the income tax reduction will be applied when individuals file their personal income tax returns.

Beginning in 2018, it will be reflected in the source deductions made on salaries and wages and other amounts (such as retirement benefits).

Individuals who are required to pay their income tax in instalments can adjust, as per usual, any instalment payment due after March 15, 2017, in order to take into account the general tax reduction.

For more information, see pages A.4 to A.14 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

Under the Québec tax system, individuals can claim refundable tax credits that reduce—and in some cases even cancel—their income tax payable. These include the basic tax credit granted to all individuals (except trusts) as well as a variety of other credits individuals can claim depending on their particular situation.

The basic tax credit is calculated by multiplying the basic personal amount for the year by 20%, the same rate used to convert the following amounts into tax credits:

• the age amount, the amount for a person living alone and the amount for retirement income;
• the amount for dependants and the amount transferred by a child 18 or over enrolled in post-secondary studies;
• the amount for a severe and prolonged impairment in mental or physical functions.

Beginning with the 2017 taxation year, the conversion rate will be reduced from 20% to 16%. However, there will be no corresponding increase in income tax because:

• the basic personal amount has been increased such that income tax is actually reduced;
• the other amounts mentioned above have also been increased.

The basic personal amount has been increased from $11,635 to $14,890. The basic tax credit has therefore been increased from $2,327 ($11,635 × 20%) to $2,382 ($14,890 × 16%), resulting in a $55 reduction in income tax.

Indexation of the basic personal amount and the other amounts will resume in 2018.

Source deductions and instalment payments

For 2017, the income tax reduction will be applied when individuals file their personal income tax returns.

Beginning in 2018, it will be reflected in the source deductions made on salaries and wages and other amounts (such as retirement benefits).

Individuals who are required to pay their income tax in instalments can adjust, as per usual, any instalment payment due after March 15, 2017, in order to take into account the general tax reduction.

For more information, see pages A.4 to A.14 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

Under the Québec tax system, individuals can claim refundable tax credits that reduce—and in some cases even cancel—their income tax payable. These include the basic tax credit granted to all individuals (except trusts) as well as a variety of other credits individuals can claim depending on their particular situation.

The basic tax credit is calculated by multiplying the basic personal amount for the year by 20%, the same rate used to convert the following amounts into tax credits:

• the age amount, the amount for a person living alone and the amount for retirement income;
• the amount for dependants and the amount transferred by a child 18 or over enrolled in post-secondary studies;
• the amount for a severe and prolonged impairment in mental or physical functions.

Beginning with the 2017 taxation year, the conversion rate will be reduced from 20% to 16%. However, there will be no corresponding increase in income tax because:

• the basic personal amount has been increased such that income tax is actually reduced;
• the other amounts mentioned above have also been increased.

The basic personal amount has been increased from $11,635 to $14,890. The basic tax credit has therefore been increased from $2,327 ($11,635 × 20%) to $2,382 ($14,890 × 16%), resulting in a $55 reduction in income tax.

Indexation of the basic personal amount and the other amounts will resume in 2018. 

Source deductions and instalment payments

For 2017, the income tax reduction will be applied when individuals file their personal income tax returns.

Beginning in 2018, it will be reflected in the source deductions made on salaries and wages and other amounts (such as retirement benefits).

Individuals who are required to pay their income tax in instalments can adjust, as per usual, any instalment payment due after March 15, 2017, in order to take into account the general tax reduction.

For more information, see pages A.4 to A.14 of the Additional Information 2017-2018 (PDF – 2.71 MB) published by the Ministère des Finances.

To make it easier for corporations to determine whether they qualify for the small business deduction (SBD), the qualification criterion concerning the minimum number of hours worked is being replaced by a qualification criterion concerning the minimum number of hours paid.

The special rules applicable to the qualification criterion based on hours worked are being adapted to take into account the fact that the qualification criterion will now be based on hours paid for a corporation's employees.

More specifically, the following rules will apply:

• A maximum of 40 hours per week per employee will be considered.
• The expenditure relating to hours paid for an employee will have to be incurred for the taxation year covered by the application for the SBD.
• The threshold of 5,500 hours applying to the current year will be based on a full taxation year, and the threshold will be reduced proportionally in the case of a short fiscal period. The proportional reduction will not be applied for the previous year consolidated basis test.
• With respect to the previous year consolidated basis test, the corporation will have to consider the taxation years ended during the calendar year preceding the year during which the corporation's taxation year ends.
• Each corporation in a group of associated corporations will have to count its employees' hours paid. The hours paid for a subcontractor that is acting on behalf of a corporation will not be counted by the corporation, but may be counted by the subcontractor.

Furthermore, a person who holds, directly or indirectly, most of the shares with full voting rights of the capital stock of a corporation will be deemed to have received, from the corporation for a taxation year of the corporation, subject to the above conditions, remuneration corresponding to a conversion factor of 1.1 for each hour the person worked as an active participant in the corporation's activities for the year.

The corporation will have to document the hours worked by a person in these circumstances.

The qualification criterion is replaced as of the coming into effect of the refocusing of the SBD, for taxation years beginning after December 31, 2016.

For more information, see pages A.25 to A.27 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.

To make it easier for corporations to determine whether they qualify for the small business deduction (SBD), the qualification criterion concerning the minimum number of hours worked is being replaced by a qualification criterion concerning the minimum number of hours paid.

The special rules applicable to the qualification criterion based on hours worked are being adapted to take into account the fact that the qualification criterion will now be based on hours paid for a corporation's employees.

More specifically, the following rules will apply:

• A maximum of 40 hours per week per employee will be considered.
• The expenditure relating to hours paid for an employee will have to be incurred for the taxation year covered by the application for the SBD.
• The threshold of 5,500 hours applying to the current year will be based on a full taxation year, and the threshold will be reduced proportionally in the case of a short fiscal period. The proportional reduction will not be applied for the previous year consolidated basis test.
• With respect to the previous year consolidated basis test, the corporation will have to consider the taxation years ended during the calendar year preceding the year during which the corporation's taxation year ends.
• Each corporation in a group of associated corporations will have to count its employees' hours paid. The hours paid for a subcontractor that is acting on behalf of a corporation will not be counted by the corporation, but may be counted by the subcontractor.

Furthermore, a person who holds, directly or indirectly, most of the shares with full voting rights of the capital stock of a corporation will be deemed to have received, from the corporation for a taxation year of the corporation, subject to the above conditions, remuneration corresponding to a conversion factor of 1.1 for each hour the person worked as an active participant in the corporation's activities for the year.

The corporation will have to document the hours worked by a person in these circumstances.

The qualification criterion is replaced as of the coming into effect of the refocusing of the SBD, for taxation years beginning after December 31, 2016.

For more information, see pages A.25 to A.27 of the document entitled Additional Information 2017-2018 (PDF – 2.71 MB), published by the Ministère des Finances.