In a press conference on Wednesday afternoon, Finance Minister Eric Girard said that without his government’s intervention, school service centers, whose needs have exploded as a result of the pandemic, should have imposed tax hikes of up to 17% for certain taxpayers.
That significant increase in school taxes would be due to an increase in the number and pay of school service center staff, explained Mr Girard, saying he wanted to limit the ongoing cost-of-living rises hitting taxpayers. Months.
The deficit will be made up by Quebec, which estimates its financial support at $173 million.
Questioned by the press, the minister assured that the gesture had nothing to do with the elections or the liberal promise of tax cuts. Rather, he explained that his release was coordinated with the publication of tax rates in the Gazette officielle du Québec for filing tax assessments in July.
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Technically, the school tax rate for 2022 will be reduced from $0.1054 to $0.1024 per $100 tax rate, the announcement said.
The state contribution will be increased to compensate the school service centers accordingly.
The $173 million in aid announced Wednesday is on top of the $1.5 billion subsidy Quebec pays them each year to lower Quebecers’ school tax burden and a uniform tax rate across Quebec to maintain.
This practice came into force after the passage of Bill 3 in April 2019, which essentially aimed to end inequalities between regions. The standardization of the lowest rate taxation, which was to be carried out over four years, was finally brought forward to July 1, 2020.
The minister warns that the danger of a recession is increasing
In addition, Eric Girard argues that the US Federal Reserve’s decision to raise interest rates by three-quarters of a point will slow economic growth.
Nevertheless, the minister considers the risks of a recession in Québec to be relatively low. He now estimates it to be around 35% in 2023. However, the probability of positive growth is still twice as great as the probability of a recession, he pointed out on Wednesday.
The effects of the recent monetary tightening measures should be felt towards the end of the year, the minister stressed.