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October 7, 2013

Québec Government's New Economic Policy

Today the Québec government presented its new economic policy, which includes measures to enhance business performance.

 

 

Lower electricity rates for businesses that invest in Québec

 

As part of the job-investment rate package, surplus electricity will be supplied at a reduced rate to businesses that invest in new projects in Québec.

 

The job-investment price offering will apply to new investment projects entailing new demands for 15 MW and over associated with a development niche identified by the government in concert with Hydro-Québec and Investissement Québec.

 

  • The rate will be granted for a ten-year period.
  • The rate will escalate over time to ensure a gradual transition to the regular rate.
  • Customers that benefit from the job-investment rate package will also be eligible for the other pricing options linked to their consumption levels, in particular regarding interruptible power and additional power.
  • The regulated trade practice related to grid connections will not be modified.

 

The government, Hydro-Québec and Investissement Québec will establish and implement the job-investment rate package, which will not lead to any increases in electricity rates. The government’s focus is on job creation and investments in sectors it deems to be priorities, such as:

 

  • natural resource processing;
  • manufacturing of components associated with transportation electrification;
  • manufacturing of components associated with renewable energies and green technologies;
  • data centres and information technologies.

 

Enhancement of the Economic Development Fund to attract more major investment projects in transportation electrification

 

To attract major investments in the transportation electrification sector, the government will allocate an additional $50 million to the Economic Development Fund.

 

  • The additional funding will be earmarked for the electric vehicle industry.
  • Projects that support supply chains in the industry will also be eligible.

 

The funding will make it possible to capitalize on Québec’s abundant natural resources and substantial surpluses of low-cost electrical power to produce goods for which there continue to be strong export business opportunities.

 

Three tax measures to stimulate business investments

 

As part of Québec’s Economic Policy – Putting Jobs First, the government has announced three tax measures designed to stimulate business investment:

 

  • a lowering of the investment threshold to qualify for the tax holiday for major investment projects (THI), from $300 million to $200 million;
  • enhancements to the investment tax credit, including a 10-percentage-point increase in the higher tax credit rates for manufacturing SMBs across Québec;
  • a 25% tax credit on expenditures for manufacturing SMBs that invest in information technologies (IT).

 

These initiatives will benefit close to 4,000 companies and represent approximately $80 million in support over a full year. They will cost slightly more than $200 million by 2016–2017.

 

These three measures will be included in Québec’s forthcoming industrial policy.

 

October 7, 2013

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Benoît Larouche

Director, Business Development, New York

212 843-0976