April 3, 2025
Quebec: 2025 Budget
The Quebec 2025 budget was tabled on March 25, 2025, introduces several significant changes aimed at addressing fiscal challenges and modernizing the province's tax and pension systems. Below are some of the notable updates:
Harmonization of Insurance Premium Tax
Currently, tax is charged on insurance premiums at a rate of 9%. This differs from the current QST rate of 9.975%. One of the key measures in the budget is the harmonization of the insurance premium tax rate with the Quebec Sales Tax(QST).
Therefore, the tax rate on insurance premiums will increase to 9.975% effective January 1, 2027.
Exclusions from the Medical Tax Credit
Starting in 2026, the eligibility criteria for medical tax credits will be tightened. Only medical expenses for health services provided by practitioners who are members of a professional order in Quebec will qualify for these credits.
This change excludes alternative medicine services, such as those provided by homeopaths, osteopaths, naturopaths, and phytotherapists. The government aims to align Quebec's medical tax credit system more closely with federal standards while ensuring that tax benefits are reserved for regulated medical practices.
Changes to the Quebec Pension Plan (QPP)
The budget also outlines amendments to the Quebec Pension Plan (QPP), effective January 1, 2026. The QPP will exclude months of disability from the retirement pension calculation. The change applies to the QPP base plan and applies to those with at least 24 months on disability due to an employment injury via CNESST. This adjustment aims to provide fairer treatment to individuals whose work capacity has been affected by long-term injuries or illnesses.
Full details are available within the Quebec Budget:
