Election Promises: September 2nd, 2022
Hello All,
The Quebec provincial election is quickly approaching and will take place on October 3rd. While it looks like the incumbent CAQ is going to win, by an even larger majority than the previous election, there is a possibility that the polls aren’t entirely accurate.
As in most elections, there are a slew of promises from each of the provincial parties, that try to appeal to the hearts and minds (and pocketbooks) of Quebeckers. These promises, as with the majority of election proposals, are somewhat haphazard and target measures that make for the best soundbites. The upside for us is that almost all parties are promising tax cuts which will have a direct impact on our bottom line.
The hot button issue for this province (and pretty much worldwide) is inflation and each of the parties want to be seen as doing something to target it. As mentioned several times in this newsletter, inflation has affected almost every Canadian and while it improved in July, compared with June, there is still no end in sight.
It is interesting to note that there has been an unanticipated surplus in tax revenues in Quebec (and by extension all of Canada) due to inflation. This is a consequence of higher sales tax on goods and services as well as an increase in business profits which then contributes to higher income tax. Of course, the taxpayer has had to bear this burden, so it would seem appropriate that we should receive some relief. Each of the various parties, perhaps recognizing this, are proposing tax cuts in slightly varying forms.
The CAQ wants to reduce the income tax rates for the lowest two tax brackets by 1% in 2023 and 2.5% over the next ten years. They also wants to give each Quebecker who earns less than a $100k a flat out bonus of between $400 and $600.
The liberals would like to reduce the income tax rates for the lowest two tax brackets by 1.5%. Additionally, they want to freeze Hydro Quebec rates and abolish the Quebec sales tax on the first $4,000 of Hydro charges. Finally they want to abolish QST on basic necessities. They promise that these measures, along with others to come, will save the average Quebeckers $5k per year.
The Conservative Party of Quebec has promised even more significant tax cuts than the ones proposed by the CAQ and the liberals, in the amount of about $2,000 a year for a worker earning $80,000. They have also promised to suspend the provincial gas tax.
Quebec Solidaire, similar to the liberals, think that the QST on essentials should be tax exempt until inflation returns to a more normalized 3%. The items which they would like to exempt from QST include food, clothing, repairs, medications and body care items.
Each of these measures is a somewhat transparent ploy to win votes. They work because they are tangible and most of us are happy to pay less tax and receive financial incentives. The problem, of course, is that it comes at the expense of longer term measures such as improving infrastructure, healthcare, education etc. and avoids dealing with inefficiencies and ineffectiveness of the governments in charge.
I’ve had some discussions with folks about the importance of registering online with Revenue Canada (and Revenue Quebec where applicable) recently. If you have a business, you should register for my business account as soon as you launch (or now if you haven’t already). My blog post covers the why and the how.
Blog Post
Why you should register for CRA and RQ My Business Account (and how to do it)
With all data moving to the cloud these days and ubiquitous online access to banking, customer and supplier portals, it makes sense that Revenue Canada (CRA) and Revenue Quebec (RQ) have followed
Small Business Articles/Tips
Uncashed Cheques? Apparently CRA has $1.4 billion in uncashed cheques sitting around (!) and will be sending out notifications to 25,000 Canadians.
Going into business with your spouse? Some tips on mitigating the problems that occur including defining your roles and setting boundaries
My CBC Interview on Election Promises: If you are itching to hear more about election promises, I was interviewed on CBC radio a couple of days ago. You can check it out here.
Tax Stuff:
CRA Gets Schooled: An interesting court case which has the tax court reprimanding CRA for second guessing what constitutes marketing activities for a couple in business.
Top 5 Questions for CRA: Including registering for my business account, authorized representatives etc.
QuickBooks Tip: Categorize vs Transfer in Banking Download
When you expand a transaction that has been downloaded in banking, you are given the option to categorize or transfer the amount. The difference between categorize and transfer is that the former allows you to choose any account category, while the latter (transfer) only allows you to choose some accounts on the balance sheet. When in doubt, and for my clients that are not accountants, I suggest to always select categorize as this prevents the frustration of not seeing all the accounts on the dropdown list. Other than that there is no difference between the two.
Books and Resources
Small Business Tax Facts(Sole Proprietorships/Registered Businesses/Self Employed Workers)
This book helps you have a better understanding of tax (brackets, tax rates, deductions etc), how it applies to your unincorporated small businesses and how to do your own tax return (or at least understand what your accountant does). It also includes a comprehensive breakdown of deductible expenses, by category with special sections on more complex deductions such as home office, vehicle and capital cost allowance.
FastStart Your Corporation(Corporations)
A step by step guide to starting your small business corporation, including what you need to know about incorporation, setting up your accounting and tax considerations.
QuickStart your QuickBooks(Sole Proprietorships and Corporations)
A comprehensive guide that takes you through the many features of QBO and gives you step by step instructions on how to setup and work with QBO day to day. It is ideal for beginners who have never used QBO before and also for those who are currently using it, but have questions or need guidance.
FastStart Your Business (Sole Proprietorships)
A step by step guide for anyone who is planning to start a Canadian business or become self employed (and does not want to incorporate) and wants to know what they need to do or simply has questions.
Small Business and Your Dividends (Corporations)
For incorporated small business owners who want to know more about small business dividends, the differences between salary vs dividends and which is better and step by step instructions on how to file your own dividend declarations (T5s).
Use discount code “special” to save 20% on any (or all) book(s) when you purchase from the website.
Please note that all books on my website are in PDF format.
If you prefer a print version, all books are also available at Amazon . Note that print versions purchased on Amazon include a complimentary PDF - you just need to email me and include proof of purchase.
Free Resources
Business 2022 Tax Deadline Calendar
Starting A Corporation Checklist
Start Your Business Checklist
Dividend Declarations Checklist
Small Business Tax Return Checklist
QBO Set Up Checklist.
Small Business Calculators
Previous newsletters.
Consultations
I also provide consultation services where I can answer your specific questions relating to your small business and/or finances, provide clarity and give you guidance. Additional details can be found here and here.
Note that I no longer provide ongoing accounting or tax preparation services.
Reviews/Feedback
I would love to hear your comments on my current blog posts, topic ideas for new blogs, book feedback or anything else that you want to talk to me about. You can use my feedback form or email me directly at ronika@montrealfinancial.ca.
For anyone who has purchased my books through Amazon or directly and found them useful, I would be very grateful for a review on Amazon (to leave a review you only need to have an account with Amazon even if you did not purchase the book from there).
Finally, if you think anyone would benefit from this newsletter, you can send them to my subscribe link.
My next newsletter will October 7th (I’m taking the rest of September off :)). Hope everyone has a lovely and productive month.
Ronika