Quebec’s Finance Minister would no doubt have preferred to draw up his seventh budget under more favourable circumstances. But he had to face the facts: the Quebec economy could be in for some strong headwinds generated by the policies of the new U.S. administration. The outcome: a budget deficit that will hit a record-breaking $13.6 billion due to decreased tax revenue combined with the government’s planned economic support measures. Even so, the goal of a balanced budget by 2029-2030 has been maintained. 

Beyond this new reality for public finances, what about our personal finances? Here are 10 takeaways. 

1. No tax increases, but… 
   For individual taxpayers, the Minister is not planning to raise any taxes, change the tax brackets or introduce an across-the-board sales tax (QST) increase. However, he did announce a long list of more targeted tax measures, many of which will only come into force on January 1, 2027.  
    
   These are the main ones. 

2. Higher sales tax on insurance products  
   The sales tax on insurance premiums, currently 9%, will be brought into line with the QST with an increase to 9.975%. For a household spending $4,000 a year on insurance, as an example, this would represent an additional cost of $39. For the government, on the other hand, it should raise about $996 million by 2030. The increase will take effect in January 2027. The existing exemptions, including those on personal insurance premiums for individuals and premiums for certain mandatory plans, will remain in place. 

3. A new contribution for electric vehicles 
   Do you own an electric vehicle or plug-in hybrid? Starting in January 2027, you’ll be losing an advantage you had over the owners of gas-powered vehicles, who are subject to a specific tax that doesn’t affect you. But now you will also have to make an annual contribution of $125 for an electric vehicle and $62.50 for a plug-in hybrid. This measure is intended to restore some fairness among motorists while offsetting the predictable drop in government revenues from the specific tax on fuel. It should also be noted that the government will end free access to toll bridges and ferries for electric and plug-in hybrid vehicles as of March 31, 2027. 

4. Your car might no longer be a luxury vehicle 
   Another change of interest to car owners. Since 1998, an additional registration fee has applied to luxury vehicles in order to help finance the cost of transportation networks. The “luxury” qualification applied to any vehicle weighing 3,000 kg or less, whose production year dates back seven years or less, and whose value is over $40,000. On January 1, 2027, this threshold will rise to $62,500 to reflect the significant increase in vehicle prices in recent years. As an example, the owner of a $70,000 vehicle would save $225 thanks to this change, while the owner of a vehicle worth less than $62,500 will not pay any additional registration fee. Note that electric vehicles, previously exempt, will now also be subject to this fee if their value exceeds $62,500.  

5. Some medical expenses will no longer be deductible  
   Do you usually apply for the medical expense tax credit on your annual income tax return? Be aware that the government wants to better regulate the expenses that qualify for this tax assistance. Starting in 2026, only medical expenses for health services provided by practitioners who are members of a professional order in Quebec will be eligible. This will exclude expenses for alternative medicine services, such as those provided by homeopaths, osteopaths, naturopaths and herbologists. 

6. A new age limit for childcare expenses  
   Perhaps your family is one of those benefitting from a refundable tax credit for childcare expenses (excluding reduced-contribution childcare services). For you to qualify, your child must be under 16 years of age during the year. This age limit is going to be lowered to 14 years as of 2026. However, nothing will change for children with a severe and prolonged impairment in mental or physical functions, since there is no age limit in that case.  

7. No more tax shield  
   Are you familiar with the measure known as the “tax shield”? No? Apparently, you’re not alone: the government feels that this measure is so poorly understood and under-used by Quebec taxpayers that it should be abolished. Initiated in 2015, the tax shield was intended to compensate taxpayers who lost certain tax benefits, such as the childcare tax credit, when their income increased. It will be eliminated during fiscal 2026-2027. The government estimates that this will save about $148 million over five years. 

8. Donations to political parties will no longer be deductible 
   Like the tax shield, the tax credit for donations to political parties is another measure that the government considers inefficient and under-used. It will be abolished as of January 1, 2026. This tax credit of up to $155 only applies to political parties at the municipal level. 

9. End of the tax credit for cultural patronage  
   Major donors to cultural organizations should note that the tax credit for cultural patronage, introduced in 2013, will also be abolished. This measure was aimed at recognizing the importance of the patronage role that some individuals play in the funding of cultural organizations. Given its complexity and low uptake, the Minister decided to end this credit as of March 26, 2025. However, patrons who already have a donation agreement will continue to benefit from the tax credit for the remaining period. Moreover, other major donors will be able to benefit from an additional 25% tax credit for an initial substantial cultural donation and from the tax credit for donations of up to 25.75%. 

10. More than $2.6 billion for businesses  
    Finally, if you own or operate a business, you will certainly want to take a look at the tax measures for the business community. To better support businesses with current and future challenges, Minister Girard announced that eight currently available tax measures will be replaced by the CRIC, a new tax credit for research, innovation and commercialization. With an envelope of $2.41 billion, this program aims to promote innovation and intellectual property development. It will cover basic and applied research, experimental development and pre-commercialization activities. Note that the government has also confirmed its intention to harmonize its tax regime with that of the federal government with respect to accelerated depreciation measures. In all, the Minister deems that measures for businesses will result in additional financial support totalling more than $2.6 billion over five years. 

As we can see, this 2025-2026 budget contains a great many targeted changes that may not involve new taxes or tax increases, but do away with some of the existing tax breaks for individuals. As for entrepreneurs, they might want to take a detailed look at the new measures introduced in support of innovation and market development. 

Obviously, this is just an overview. To find out more, see the complete documentation published by the Ministère des Finances, available here.  

And don’t hesitate to talk to your advisor as well. He or she can help you assess the effect that various budget measures will have on your specific situation, and offer some clarity on any other financial questions you may have.