Quebec Budget 2024: Business Funding for a Strong Economy 

Quebec, known for its vibrant economy and diverse industries, faces a fiscal landscape marked by an $11 billion deficit. This deficit includes a $1.5-billion contingency reserve and a $2.2 billion payment into a fund dedicated to reducing debt. Despite challenges, the two largest budget categories, health care and education, are on the rise.  

This blog takes a focused approach to the budget from a business funding perspective. 

Quebec’s economy is set for transformation with Budget 2024, which unveils strategic measures to fortify workforce development and bolster key industries. In this comprehensive government funding outlook, we review pivotal initiatives across diverse sectors, emphasizing innovation, sustainability, and support for entrepreneurs. These visionary measures signify a forward-thinking approach aimed at positioning Quebec on the global stage. 

Check out our Federal and Provincial 2024 Budget page to learn about business funding takeaways in the upcoming budget drops.  

Quebec’s Job Market Investments 

In response to the evolving needs of Quebec’s economy, Budget 2024 introduces strategic measures to boost workforce development and support key industries.  

• Improving Graduation Rates in the Energy Transition Sector: 
  • With increasing demand in the energy transition sector, particularly in the battery industry, the government allocates $26 million over five years to enhance graduation rates. 
  • Focused on the Vallée de la transition énergétique (VTE) innovation zone and Northvolt establishment, the funding aims to quickly supply skilled workers for the growing battery industry. 

• Abolishing the Tax Credit for Retention of Experienced Workers (CMETE): 
  • Introduced in Budget 2019-2020, the CMETE aimed to retain experienced workers aged 60 and above through tax incentives. 
  • However the CMETE lost its effectiveness due to labour shortages, leading the government to abolish it with the goal of generating savings of $251.9 million over five years. 
  • The decision is influenced by changes to the Québec Pension Plan (QPP) reducing employer contributions for workers aged 65 and over. 

• Enhancing Tax Credit for Québec Film and Television Production: 
  • Acknowledging the cultural significance of the film and television industry, the government plans to increase the tax credit cap on labor expenditures from 50% to 65% of production costs. 
  • This initiative, set to begin the day after the 2024-2025 budget speech, better aligns tax assistance with rising labor costs, providing additional support of $86.3 million over five years. 
  • The tax credit ranges from 28% to 66%, promoting the development and profile of Québec’s unique cultural productions. 

• Supporting Innovation in the Construction Sector: 
  • Acknowledging the importance of a skilled workforce and innovative technologies in the construction sector, the government allocates $15.0 million over three years in Budget 2024-2025. 
  • This funding supports companies in the digital transformation of their operations through the implementation of a labor productivity pathway, fostering productivity gains and innovation. 
  • Complementing extensive efforts to increase and accelerate workforce training for the construction sector, this initiative ensures the completion of public-benefiting infrastructure projects. 

• Tax Credits Supporting Jobs in the IT Sector: 
  • The government aims to bolster economic activity in the IT sector by providing wage-based tax credits. 
  • These tax credits, including CDAE, CTMM, and CSPC target computer systems development, software publishing, and the video game sector, aim to ensure fairness and maximize their impact.  

Read our blog on the Top Funding for Hiring & Training for Winter 2023 and 2024. Learn how to cover your costs of onboarding and training staff today.  

Supporting the Agricultural Industry  

The agricultural sector is a cornerstone of Quebec’s economy, contributing significantly to regional development. In Budget 2024-2025, the government unveils comprehensive initiatives aimed at fortifying the agri-business sector.  

• Fostering Bio-Food Sector Development: 
  • The government allocates $107.5 million over five years to elevate the bio-food sector. 
  • Initiatives include support for sustainable agricultural investments, the creation of an investment fund for the next generation of farmers, and backing for alcoholic beverage producers. 

• Supporting Sustainable Agricultural Investments: 
  • La Financière agricole du Québec’s Sustainable Growth Investment Program receives an additional $50 million over five years. 
  • The program aids agricultural businesses in various objectives such as increasing production volumes, adopting agri-environmental practices, and fostering profitability and diversification. 

• Comprehensive Agricultural Sector Support: 
  • The government earmarks $116 million over five years in Budget 2024-2025 to bolster the agricultural sector. 
  • Initiatives include a $50 million investment fund for land acquisition, $50 million for sustainable agricultural investments, $10.0 million for supporting AgrÉcoles, and $6 million for surplus food recovery and enhancing culinary skills of young individuals. 
  • An additional $264 million is allocated to fund the farm property tax credit program, recognizing the significant increase in farmland value and ensuring competitive tax treatment for Quebec farmers. This substantial support totals $380 million over five years. 

Explore our Agri-Business Funding Directory and learn about upcoming agri-business funding opportunities. Cover business activities ranging from hiring & training, research, capital & tech adoption, and business expansion. 

Natural Resources & Sustainable Energy Funding 

In the pursuit of sustainable environmental practices, the Quebec government outlines strategic initiatives in Budget 2024-2025. Two noteworthy programs, the Blue Fund and the Natural Resources and Energy Capital Fund, take center stage.  

• Blue Fund for Water Management: 
  • Established by Bill 20 on June 9, 2023, the Blue Fund finances water protection, restoration, and management measures outlined in the Quebec Water Strategy 2018-2030. 
  • A dedicated $500 million (2023-2028) enhances the Blue Fund, with funding partly sourced from increased charges for water use. 
  • Regulatory provisions are subject to review every five years, and as of January 1, 2024, improved access to information on business water withdrawals is available. 

• Charges Payable for Water Use: 
  • Introduced in 2011, charges apply to industries withdrawing 75,000 liters of water or more per day from the environment or waterworks system. 
  • Effective January 1, 2024, charges increase from $2.50 and $70 to $35 and $150 per million liters, respectively. 
  • Additional rates are imposed for water used in bottles or containers, with businesses facing charges for withdrawals of 50,000 liters or more starting January 1, 2026. 

• Natural Resources and Energy Capital Fund: 
  • This fund of $1 billion supports natural resource development, energy transition, and green energy projects. 
  • Since 2015, over $600 million has been invested in 20 businesses. 
  • Budget 2024-2025 allocates an additional $500 million to the fund, targeting pivotal projects aligned with the Quebec Battery Development Strategy and the 2020-2025 Plan for Critical and Strategic Minerals. 

• Supporting Quebec’s Aluminum Sector: 
  • Quebec holds the title of the largest primary aluminum producer in North America and the fourth largest globally, with a crucial role in the regional economy. 
  • Innovations like ELYSIS technology contribute to environmental sustainability by eliminating GHGs linked to aluminum production. 
  • Government commitment: $31 million over three years, specifically directed towards accelerating the shift to Industry 4.0, modernizing businesses, boosting exports, and fostering innovation and research in the aluminum sector. 

Read our blog on Canadian Critical Minerals Sector Growing Rapidly in 2024 and learn about existing grant programs to support your business.  

Fostering Innovation and Forward-Thinking Initiatives 

In the pursuit of global competitiveness and prosperity, Quebec’s Budget 2024-2025 emphasizes innovation, positioning the province as a leader in strategic sectors. The government is allocating significant funds to various initiatives aimed at fostering innovation, particularly in emerging technologies. Let’s delve into the forward-thinking measures: 

• Industrial Laboratories for Innovation Zones: 
  • The government plans to introduce industrial laboratories within innovation zones, strategically positioned to expedite the promotion and transfer of groundbreaking innovations. 
  • These state-of-the-art laboratories will leverage their specialized expertise, aiming to amplify the impact of government investments in key sectors where Quebec boasts competitiveness and innovation capacity. 
  • Their role extends to facilitating business benefits from applied research, addressing industrial challenges, and expediting the commercialization of new products and processes. 
  • The government is committed to allocating $125 million over five years to realize this innovative vision. 

• Investment and Innovation Tax Credit (C3i) renewal until 2029:  
  • The C3i tax credit, which supports investment and innovation, will be renewed until 2029. 
  • The renewed C3i offers simplified fiscal conditions and provides fully refundable tax assistance based on eligible investments. 
  • This renewal represents significant financial support for businesses over the next five years. 

• Growth in Quebec’s Aerospace Sector: 
  • Responding to improved economic conditions post-pandemic and anticipating major projects in the aerospace and space sectors, the government earmarks $74.5 million over five years. 
  • This funding aims to support the development of cutting-edge aerospace technologies, fostering increased competitiveness among businesses in the sector. 
  • Additionally, a key focus is on attracting and retaining talent to ensure the sustained growth and prominence of Quebec’s aerospace industry.

• Promotion of Technology Adoption and Research: 
  • Recognizing the potential of productivity gains through technological shifts amid a labor shortage, the government unveils initiatives totaling $203.6 million over five years. 
  • These initiatives include accelerating the government’s digital transformation, supporting emerging technologies, modernizing property taxes to promote robotization, and facilitating the mandates of the Institut de la statistique du Québec. 

• Support for Emerging Technologies: 
  • Acknowledging the transformative role of artificial intelligence, quantum technologies, and ICT innovations in enhancing productivity, the government allocates $15 million over three years. 
  • This funding is directed towards fostering multidisciplinary collaboration to drive innovation in these technologies and financing business innovation projects to develop the technology ecosystem in Quebec. 

• Investments in Quebec’s AI Ecosystem: 
  • Highlighting the success of past investments (over $750 million since 2016) in the AI ecosystem, the government remains committed to sustaining the responsible development of AI. 
  • Under the 2022-2027 Quebec Research and Innovation Investment Strategy (QRIIS2), $125 million investment is planned, supporting talent attraction and training, assisting businesses, coordinating stakeholders, and providing financial support for AI projects. 
  • The government further emphasizes its commitment to fostering the growth of a diverse AI ecosystem, comprising over 80 research and transfer institutions and nearly 475 businesses developing AI applications and solutions. 
  • Various advantageous tax incentives, including R&D credits, e-business development credits, and tax holidays for foreign researchers and experts, continue to be offered to further incentivize innovation in the AI sector. 

The Scientific Research and Experimental Development (SR&ED) tax credit is one of Canada’s largest government funding incentives and offers significant opportunity for businesses that are creating products, processes, and more through innovation. Watch our video on SR&ED 101: How To Determine If You’re Eligible for SR&ED. 

Evolution of Electric Vehicle Program Rebates 

In response to the transformative growth of the electric vehicle market in Québec, the government is adjusting the Roulez Vert program rebates that have been in place since 2012.  

• Introduction and Necessity of Rebates (2012): 
  • The government initiated the Roulez Vert program in 2012, providing rebates for fully electric and plug-in hybrid vehicle purchases. 
  • At the program’s inception, these incentives kickstarted the electrification of the vehicle fleet in Québec. Limited vehicle models and charging infrastructure made early adoption necessary to support future growth. 

• Maturation of the Electric Vehicle Market (Present): 
  • With growing consumer interest and advancements in technology, the electric vehicle market in Québec has matured significantly. 
  • In the third quarter of 2023, over 20% of new vehicles sold in Québec were electric, demonstrating the substantial shift towards electric vehicles. 
  • The current electric vehicle fleet in Québec exceeds 240,000 vehicles, highlighting the success and acceptance of electric transportation. 

• Revised Rebates (Effective January 1, 2025): 
  • Recognizing the evolving landscape, the government announced revised maximum rebates starting on January 1, 2025: 
  • $4,000 for new fully electric or fuel cell vehicles and $2,000 for new plug-in hybrid vehicles costing less than $65,000. 
  • $2,000 for used fully electric vehicles and $1,000 for electric motorcycles. 

• Gradual Reduction and Phase-Out (Starting January 1, 2027): 
  • Rebates for electric vehicle purchases will be gradually reduced and will cease to be offered on vehicles registered on or after January 1, 2027. 
  • Vehicles registered up to this date remain eligible for the federal government’s $5,000 rebate until March 31, 2025, or until funds are depleted.

• Utilization of Released Funds: 
  • The funds released from the rebate adjustments will be redirected to initiatives aimed at combating climate change. 

Download our free guide and gain insight into Electric and Vehicle Autonomous Trends. Unlock federal and provincial programs designed to support EV businesses.  

 

Catalyzing Entrepreneurship: Government’s Vision and Initiatives 

At the core of the government’s economic vision lies a robust commitment to entrepreneurship, as exemplified by the Plan québécois en entrepreneuriat 2022-2025 (PQE). This strategic plan is designed with a dual focus: 

• Empowering Entrepreneurs: 
  • The PQE aims to promote and uplift entrepreneurs by providing them with high-quality consulting services. 
  • Focused on nurturing a supportive ecosystem, the government envisions an environment conducive to the organic growth of businesses. 

• Financial Reinforcement for Succession: 
  • To fortify these entrepreneurial endeavors, the government is injecting an additional $9 million over three years. 
  • Specifically allocated to support the acquisition of Québec businesses, this financial boost ensures a seamless transition of entrepreneurial leadership. 

Revenu Québec’s Outreach Initiative for SMBs: 

Acknowledging a prevalent lack of awareness among Small and Medium-sized Businesses (SMBs) regarding available tax credits, Revenu Québec takes proactive measures: 

• Information, Education, and Support: 
  • Revenu Québec initiates a comprehensive awareness campaign, addressing the informational gap on corporate tax credits among SMBs. 
  • The initiative encompasses providing vital information, educational resources, and hands-on support to guide SMBs through the complexities of available tax credits. 

• Ambitious Outreach Goals: 
  • Over the coming years, Revenu Québec aims to inform and support a diverse array of SMBs, ensuring they maximize their potential benefits from corporate tax credits. 

To expedite the process of discovering, qualifying, and understanding the application process for government funding programs, download our most popular Canadian Business Funding Guide. 

Why Apply for Funding 

As you explore the diverse opportunities outlined in Quebec’s Budget 2024, we encourage businesses to seize the moment and tap into available government funding. The initiatives presented here highlight the province’s commitment to economic growth, innovation, and sustainability. To take advantage of these funding opportunities, connect with our team.  

Whether you’re venturing into entrepreneurship, contributing to sustainable energy practices, or enhancing workforce development, our experts can guide you through the funding application process. Apply with us today!