Quebec — 2022 budget measures and more substantively enacted

Quebec Bill 6 received first reading on December 9, 2022. This bill contains measures previously announced in Quebec's 2022 budget and in various information bulletins published in 2021 and 2022. Specifically, Bill 6 includes previously announced measures to amend several provincial tax credits and deductions, including to extend enhancements to the Credit for Investment and Innovation (C3i).

The corporate income tax measures included in Bill 6 are considered substantively enacted for IFRS and Accounting Standards for Private Enterprise (ASPE) purposes on December 9, 2022, the date the bill received first reading (as Quebec has a majority government). The corporate income tax measures are not considered enacted for U.S. GAAP purposes until the date the bill receives Assent.

Bill 6 includes changes announced in Quebec’s 2022 budget to:

• Extend the temporary increase to the C3i tax credit for one year, until December 31, 2023
• Extend the refundable tax credit for the production of pyrolysis oil in Quebec for a period of 10 years, until March 31, 2033, and make certain changes to the credit
• Introduce the refundable tax credit for the production of biofuel in Quebec, up to a maximum of 300 million litres per year, as of April 1, 2023.

Bill 6 also includes changes announced in Quebec information bulletins published in 2021 and 2022 to:

• Clarify the definition of “qualified intellectual property asset” for the Incentive Deduction for the Commercialization of Innovations (IDCI), effective for taxation years that begin after December 31, 2020
• Expand access to the tax credit to foster the retention of experienced workers, for taxation years that end after December 30, 2022
• Expand access to the refundable tax credit for small- and medium-sized businesses in respect of persons with a severely limited capacity for employment, for taxation years that end after December 30, 2022
• Narrow the refundable tax credit relating to mining, petroleum, gas or other resources, by excluding expenses related to oil, gas or coal incurred after March 31, 2023.

Bill 6 also includes changes to harmonize with certain federal changes that deal with, among other things:

• Temporary immediate expensing of eligible property for Canadian-controlled private corporations
• Expanded eligibility for immediate expensing of eligible property to include sole proprietorships and certain partnerships
• Charitable partnerships
• The conditions of eligibility for a rebate of the Quebec sales tax in respect of new housing.

For more information, contact your local KPMG adviser.

Information is current to December 8, 2022. The information contained in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's National Tax Centre at 416.777.8500