Québec Budget 2022-2023: Measures for a Wide Range of Sectors, Too Little to Address the Labour Shortage
True to form, a team of Raymond Chabot Grant Thornton experts released its Tax Bulletin, which reports on the tax measures contained in the Québec budget tabled by Québec Finance Minister, Éric Girard on March 22, 2022.
Our firm is taking this opportunity to present its observations regarding this fourth and final budget tabled by the CAQ government before the fall general election. This pre-election budget is presented in the context of an “almost” post-pandemic situation, where the effects of inflation, the war in Ukraine or a 6th wave of the pandemic could adversely affect a financial outlook that is currently based on a solid economy and sound budget planning.
It should be noted that according to the current financial framework, a balanced budget, in the accounting sense, that is without a contribution to the Generations Fund, would be achieved by 2023-2024. After payment to the Generations Fund, the 2023-2024 year would end with a budget deficit of $3.9 billion and a return to a balanced budget would still be maintained for 2027-2028.
Promoting growth by taking action on several fronts with limited measures to counteract inflation
Raymond Chabot Grant Thornton recognizes that this budget targets numerous activity sectors. “Health, education, tourism, culture, regional development, environment, community, there are numerous groups that will benefit from this budget,” says Regional Vice-President and National Business Transfer Leader for the firm, Éric Dufour.
Tax Partner, Jean-Pierre Poulin, says that “The firm applauds the implementation of the new Québec research and innovation strategy, with an envelope of $1.3 billion; the one-year extension of the enhanced investment and innovation tax credit, C3i, representing an investment of $156 million; and the significant support for the tourism and culture sectors, which have been hard hit by the pandemic, amounting to $304 million over six years and $258 million over five years respectively.”
As for the $3.2 billion investment to reduce inflation pressure among 6.4 million Québec adults with an income of less than $100,000, “this can help offset the impact of inflation on personal and household finances to a very limited extent. Nevertheless, other actions are still needed to better counter the rise in prices, notably through tax or financial measures to encourage savings,” says Tax Partner, Sylvain Gilbert.
The Workforce: A Business’s Lifeline
If there is one common priority for all organizations, it is the workforce issue. Every business leader and entrepreneur has to deal with the challenge of finding talent. Unfortunately, this budget does very little to address this issue. Helping immigrants integrate into the workforce more easily, with a new $290 million envelope, including $12 million over five years to speed up the processing of immigration applications, is good news. Nevertheless, the Québec government must go further, as Raymond Chabot Grant Thornton suggested in its prebudget proposals last February.
For example, in order to encourage experienced workers to continue working or return to work, the firm recommended creating a tax shield with an increase in the tax credit for career extension. Unfortunately, this credit currently only applies to low-income workers. “Additionally, to create a real incentive for experienced workers, the benefits they are entitled to receive upon retirement must not be jeopardized,” says Sylvain Gilbert.
Raymond Chabot Grant Thornton suggested that the rate of the tax credit for career extension should remain at 15%, but that the $5,000 deductible should be abolished and that no reduction of this credit should be applied, regardless of the individual’s taxable income. The firm also proposed that a tax shield be applied if an individual receives Old Age Security or Guaranteed Income Supplement benefits and chooses to work past age 60. This would allow the individual’s social program benefits to be offset by a refundable tax credit in the event of a reduction or loss of these social programs, up to an annual eligible salary increase of $20,000, for example. Such an opportunity should be explored quickly to encourage experienced workers to stay in the workforce longer.
Furthermore, other adjustments are required regarding the contribution by temporary foreign workers to the urgent labour needs of Québec organizations, as the firm noted in its prebudget recommendations.
“If the Québec government wants to further reduce the processing time of applicants attributable to the Temporary Foreign Worker Program (TFWP), then it should no longer require companies to target the foreign candidate before they can undertake the administrative procedures to recruit candidates,” says Marc Audet, President of AURAY Sourcing, specializing in international recruitment and member of Raymond Chabot Grant Thornton.
Unfortunately, the current TFWP process in Québec penalizes our SMEs compared to what is done elsewhere in Canada to recruit a foreign worker. In the rest of Canada, an employer can undertake the procedure without having targeted a candidate (known as an Unnamed LMIA (Labour Market Impact Assessment)), whereas Québec companies must have found the employee before beginning the recruitment process. This requirement means the Québec process takes longer than in other provinces. In the rest of Canada, the foreign recruitment process takes place at the same time as an LMIA application. This can reduce the processing time for the employer by three to four months. Once the Unnamed LMIA is obtained, the employer only has to validate the selected candidates with Service Canada, which takes five to ten days.
Psychological well-being of entrepreneurs and leaders: supporting them on the road to growth
Other than the various measures already announced for the psychological health of Quebecers and workers, including the 2022-2026 interdepartmental action plan on mental health, which we welcome, there is no support for our entrepreneurs and leaders.
While the pandemic may be coming to an end, many leaders are struggling to get back on the road to growth due to the many challenges they have faced or continue to face, such as personal concerns, business issues like cash flow and managing revenues, profits and expenses.
“An assistance program, supported by external experts, that would allow entrepreneurs to obtain a comprehensive business diagnosis to make informed decisions and manage their organizations more effectively, particularly in a period of recovery and changes, should be made available quickly and partially financed by the Québec government,” Éric Dufour stated.
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Raymond Chabot Grant Thornton will be pleased to announce the winners and present them with the Transfert d’entreprise de l’année award.
As a partner of the 2022 Gala des Grands prix de la relève d’affaires organized by the Regroupement des jeunes chambres de commerce du Québec (RJCCQ), Raymond Chabot Grant Thornton invites all young Québec entrepreneurs, 40 years and younger, executives, self-employed workers and professionals who have stood out in their respective industries all year long, to apply before Thursday, April 28, 2022.
On Friday, June 3, 2022, during the prestigious Gala des Grands prix de la relève d’affaires, we will be pleased to announce the winners and present them with the Transfert d’entreprise de l’année award. This award is for young entrepreneurs who have taken over a business less than five years ago. Applicants will have to explain the transfer process and their vision, and demonstrate how they have increased the company’s performance or brought it to another level.
Applicants can become a finalist or winner in one of the following categories:
- Jeune chambre de commerce or Aile jeunesse of the Year
- Activity of the Year
- Volunteer of the Year
- Succession director of the Year
- Entrepreneur of the Year
- Retailer of the year
- SME or start-up of the Year (tourism sector)
- Diversity person of the Year
- Business transfer of the Year
- Woman Leader
- Executive manager of the Year
Our firm is proud to be collaborating on this prestigious contest that rewards young leaders who, through their actions, are helping Québec become more innovative and competitive. Good luck to all!
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Canada Digital Adoption Program (CDAP): Raymond Chabot Grant Thornton is a Certified Service Provider to Support SMEs in Developing a Digital Adoption Plan.
The Government of Canada recently announced the Canada Digital Adoption Program (CDAP) to support small and medium-sized enterprises (SMEs). The program will help them boost their e-commerce presence and digitalize their operations. It also provides financing and expert support as well as work opportunities for young people.
As a qualified service provider, Raymond Chabot Grant Thornton is able to help SMEs create a digital strategy to remain competitive, resilient and forward-thinking as our world continues to digitize.
What is a digital strategy?
An effective digital strategy is a roadmap for reaching short-, medium-, and long-term digital transformation goals. It is a foundational plan that helps determine in which technologies to invest and how to implement them for success.
How does it work?
Eligible enterprises have access to two streams: developing e-commerce activities and boosting business technology by developing and implementing a digital strategy.
The second stream provides for a grant to consult recognized advisors, including us, to prepare a digital plan. The grant will cover 90% of the eligible costs to prepare the digital adoption plan up to $15,000.
Who is eligible?
The program is available for Canadian SMEs, such as small manufacturing and food preparation companies, restaurants, tourism and leisure businesses and several other organizations that have not yet adopted digital technologies.
The program will help up to 160,000 Canadian businesses.
To find out more about the eligibility criteria or to apply, go to the program website.
We can also assist you in your process. Contact us now.
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VARS and Terranova Security Join Forces to Better Protect SMEs from Cyber Attacks
MONTRÉAL, February 21, 2022 – VARS, Raymond Chabot Grant Thornton’s cybersecurity division, and Terranova Security are proud to announce that they are enhancing an alliance for the benefit of Quebec SMEs, by placing people at the heart of data protection.
Recognized by prestigious Gartner, Terranova Security’s world-class cybersecurity awareness program, previously designed for large entities, is now available to local small and medium-sized enterprises through fully managed VARS programs at tailored prices. This is a timely service, as organizations are increasingly becoming targets of attacks and cybersecurity talent is in short supply.
Since March 2020, the heavy use of technology tools by workers has opened the door to cybercriminals. Threats are ever more sophisticated and constantly evolving. Unfortunately, humans are often the gateway to these attacks due to specific behaviours that put the business at risk.
“SMEs continue to be prime targets for cyber attacks. That’s why organizations must have the requisite knowledge and tools to ensure their sensitive information is protected from all cyber threats. This process must be supported by empowering security awareness training that focuses on behaviour change as a means of reducing the human risk factor. Terranova Security is proud to support VARS to deploy this solution in the Quebec market and help organizations train their cyber heroes,” says Mathieu Ouellette, Vice-Presdient, Sales (CSO) at Terranova Security.
“With this enhanced collaboration renewal, VARS becomes a preferred partner of Terranova Security and reiterates its leadership as a Managed Security Service Provider (MSSP). We are particularly proud to be able to offer local SMEs solutions that reflect their needs and address the lack of in-house resources they face,” says Guillaume Caron, VARS President and CEO.
For more information about the solutions offered by VARS, click here.
Learn more about the impact of the human centric approach to Terranova Security training, click here.
About Terranova Terranova Security
Terranova Security is the global security awareness training partner. For more than 20 years, it has been transforming the world’s end users into cyber heroes, empowering organizations to implement training programs that change user behaviours, reduce the human risk factor, and counter cyber threats effectively.
Terranova SecuriAnne Wellsty makes it easy to build risk-based campaigns that feature the industry’s highest-quality training content and real-world phishing simulations. As a result, any employee can better understand phishing, social engineering, data privacy, compliance, and other critical best practices. Train your cyber heroes: https://terranovasecurity.com/about-us.
About Raymond Chabot Grant Thornton
Raymond Chabot Grant Thornton is a professional services firm that has been dedicated to the success of organizations and their leaders since 1948. The firm’s advisors are committed to helping clients thrive by obtaining a deep understanding of what is important to them, their business and their industry. This knowledge, combined with a team of motivated and talented professionals, helps accelerate growth.
A Québec and Canadian leader in the areas of assurance, tax, advisory services and business recovery and reorganization, Raymond Chabot Grant Thornton relies on a team of more than 2,600 professionals, including approximately 200 partners, working in over 100 offices across the province and in the Ottawa and Edmundston regions.
Together with Grant Thornton LLP, another Canadian firm, and the Grant Thornton global organization, our global footprint spans across more than 140 countries with over 62,000 people who provide real insight, a fresh perspective and agility to keep clients moving ahead.
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Marine Detraz
Consultant, Communications and Public Affairs
Raymond Chabot Grant Thornton
Tel.: 514-705-8096
[email protected]