Residents in Quebec may be feeling a financial pinch this year due to new tax changes. Many changes went into effect on January 1, 2013, and these changes are going to hit Quebec residents in a number of different ways.
The Cost of Transportation
Commuting around town with public bus or metro transportation has become more expensive. While the cost of a single ticket remains at $3, the cost of a monthly pass has risen from $75.50 to $77.
The Cost of Passports
For those residents who require a passport for international travel, the cost of a five-year passport for both children and adults will increase in just a few months. Effective July 1, 2013, an adult passport will increase in price from $87 to $120, and a child’s passport will increase from $37 to $57. A 10-year passport will now be available for $160.
The Cost of Income Taxes
Perhaps the most costly change that will affect middle-class Quebec residents in 2013 relates to income tax. For residents who earn $100,000 or more, the tax rate will increase to 25.75 percent from 24 percent. For those who earn $130,000 or more, a higher tax rate will be combined with a higher tax on health services. The health services tax will increase to $1,000 from $200 per year. The good news is for lower income families. Those who earn between $18,000 and $42,000 per year will see their tax on health services drop to just $100 per year. Older workers, who are over age 65, will also experience financial pain this year as the annual earnings exemption that was supposed to rise annually has instead been capped at $3,000 this year.
The Pension Plan
If those changes are not enough, one additional change to Quebec’s pension plan will affect most employees. This change is small, increasing the rate by only 0.15 percent. However, with so many other changes already affecting Quebec residents, even this small change will likely be felt by many residents.
The combined effect of all of these new tax changes for Quebec residents will have significant effects, so steps should be taken to refine personal budgets to accommodate these changes.