Quebec Premier Christine Fréchette announced Wednesday a tax cut for 75,000 small and medium-sized enterprises (SMEs) to help keep businesses competitive.
On Wednesday, the province’s new premier said the tax relief comes amid economic stress the province and country have experienced since the U.S. tariffs and wars driving up energy costs.
The tax rate for SMEs will drop to 2.2 per cent from 3.2 per cent on the first $500,000 of income. Fréchette said the affected business will be able to save up to nearly $630 million over five years.
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“Each entrepreneur could save up to $5,000 per year,” the government said in a news release.
“For small shops, that can represent a month’s rent. For a manufacturing company, it could mean deciding to purchase machinery this year rather than postponing it to next year,” the premier said in Beauce, Que., alongside Finance Minister Eric Girard, Delegate Minister for the Economy Daniel Bernard, and Beauce-Nord MNA Luc Provençal.
“These are the SMEs facing the strongest headwinds. Whether it’s the tariff war, the war in Ukraine, or now the conflict with Iran in the Middle East, which is driving up energy and gasoline costs,” Fréchette added.
“This measure is aimed at making our SMEs even more competitive.”
She added that the reduction in the tax rate will give businesses additional flexibility to continue investing, innovating, and contributing to the growth of Quebec’s economy.
The tax cut takes effect as of Thursday.
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