A health contribution will be introduced as of July 1, 2010. The amount of the health contribution will be $25 per adult for 2010, $100 for 2011 and $200 as of 2012.

All individuals (other than trusts) who, at the end of a year, are resident in Québec and 18 years of age will be required to pay the health contribution for that year. An adult will be exempt if his or her family income for the year is equal to or less than the exemption threshold applicable for the year.

Exemption threshold varying with household composition (dollars)

Household composition	Exemption threshold (2010)
1 adult, no dependent children	14,320
1 adult, 1 dependent child	23,205
1 adult, 2 or more dependent children	26,305
2 adults, no dependent children	23,205
2 adults, 1 dependent child	26,305
2 adults, 2 or more dependent children	30,345

The refundable tax credit for the Québec sales tax (QST), the property tax refund and the refundable tax credit for individuals living in a northern village will be grouped into a single refundable tax credit – the solidarity tax credit. The tax credit will be paid monthly. The first payment of the solidarity tax credit will be made in July 2011.

An eligible individual will be at least 18 years of age (subject to certain exceptions) and resident of Québec. He or she must agree to have the payments made by direct deposit into an account held by the individual in a financial institution located in Québec.

The credit will first be determined based on a formula and will be reduced by 3% or 6%, of family income in excess of $31,100 for taxation year 2011. The solidarity tax credit will impact the amount that a student may transfer to his or her parents in respect of the recognized parental contribution.

Solidarity tax credit for 2011 and 2012	Amount
	2011	2012
1. Amount for QST
• Basic amount	220	265
• Amount for spouse	220	265
• Additional amount	125	128
2. Amount for housing
• Amount for a couple	435	625
• Amount for a person living alone	375	515
• Amount for each dependent child	25	110
3. Amount for individual living in a northern village
• Amount for an adult	775	790
• Amount for each dependent child	332	339
Income threshold for reduced credit	31,100	31,720

The prescribed frequency for housekeeping services will be reduced from a frequency of at least once a week to at least once every two weeks. The prescribed frequency for nursing services will be reduced from a period of at least seven hours presence a day to a period of at least three hours presence a day.

Advance payments of these tax credits will all be made, as of 2011, on a monthly rather than a quarterly basis.

Québec's tax legislation will be amended so that the notion of investment expenses, for the purposes of the limit on the deductibility of investment expenses, no longer includes an amount of bad debt deducted by an individual in calculating his property income for the year. This change will apply regarding an amount of bad debt deducted in the calculation of an individual's income for the 2009 and subsequent taxation years.

The tax rate will be raised gradually from 12% to 16% and the rate of the depreciation allowance will be reduced from 100% to 30% for property acquired after March 30, 2010. Major changes will be made to the treatment applicable to all the exploration, mineral deposit evaluation and mine development expenses an operator may incur, in particular by creating three different cumulative accounts covering such expenses. These three cumulative accounts will give rise to three separate allowances. The credit on duties refundable for losses will be limited. The calculation method of an operator's annual profit will be changed by making use of a "mine-by-mine" approach.

The IFC regime will be replaced with a refundable tax credit of up to $20,000 per eligible employee on an annual basis applying to the eligible salary paid to eligible employees of an IFC operator. In addition, an IFC must henceforth have at least six eligible employees and be operated by an eligible corporation.

An IFC employee, other than a foreign specialist, who currently claims a deduction in the calculation of taxable income of up to $50,000 per year, may continue to receive a tax benefit, which, however, will gradually reduce, until December 31, 2013.

Henceforth, besides eligible multimedia titles according to the existing rules, eligible related titles may give rise to the tax credit for multimedia titles (general component) or to the tax credit for specialized corporations, as the case may be. The 24-month period following the completion of a final version currently stipulated for the eligibility of the production work of a multimedia title will be extended to 36 months.

The rate of the tax credit for film dubbing will rise from 30% to 35% and the cap on the consideration paid for the execution of a film dubbing contract, currently 40.5%, will be raised to 45%.

Clinical trial
The tax legislation will be amended so that a research subject who participates in a clinical trial carried out by another person is deemed to carry out work, for the purposes of the refundable tax credit for R&D salaries.

Non-taxation of the indemnity paid to a research subject
The tax legislation will be amended so that the income, for a taxation year, from indemnities paid to a research subject who participates in clinical trials carried out by another person, is not taxable up to a limit of $1,500 for such year.

Arm's length subcontracting
The tax legislation will be amended so that, for a taxation year, the refundable tax credit for R&D salaries also applies to the half of the portion of the consideration that is, first, paid by a taxpayer to a corporation or a partnership with which it is at arm's length, or that is paid by a first-level subcontractor – that entered into a subcontract with the taxpayer and that is not at arm's length with him – to a corporation or a partnership that is at arm's length with the taxpayer, and that is, second, reasonably attributable to R&D work or work relating to an R&D project carried out in such year on behalf of the taxpayer, in Québec, by an individual (other than a trust) who is a shareholder of such corporation or a member of such partnership.

The tax legislation will be amended so that an expenditure incurred by a taxpayer for a taxation year regarding which the taxpayer filed a prescribed form containing the prescribed information for the purposes of a refundable tax credit no later than twelve months after the filing deadline applicable to him for the year, can be reported by the taxpayer for such taxation year on a prescribed form containing the prescribed information filed by the taxpayer, after such twelve-month period, for the purposes of another refundable tax credit he claims and that seeks to replace the one he initially claimed.

Québec's tax regulations will be amended so that a capital cost allowance rate of 60%, according to the diminishing balance method, is applicable to property consisting of a truck or a tractor designed for hauling freight, and that is primarily so used by the taxpayer or a person with whom he does not deal at arm's length, in a business that includes hauling freight, where the gross vehicle weight rating exceeds 11,788 kilograms. Such a truck or tractor must be new at the time of its acquisition by the taxpayer and be acquired after March 30, 2010.

Québec's tax legislation and regulations will be amended to enable a taxpayer to claim an additional deduction of 85% of capital cost allowance where such truck or tractor is fuelled by liquefied natural gas . That additional deduction will not be recaptured following the alienation of the property.

The rates applicable to financial institutions will be raised for salaries paid in the case of a person other than a bank or a trust company, by 0.5 percentage points, to 1.5%, for insurance premiums and amounts established regarding insurance funds, by 0.2 percentage points, to 0.55%.

The royalty will target businesses in the industrial and commercial sectors drawing 75 m³ of water or more per day either directly or from water mains. The royalty will apply two rates that depend on the use of the resource. Thus, the rate will be $0.0025/m³ for businesses using water in their production processes and $0.07/m³ for those using water as a component of their products.

The government announced, in the 2009-2010 Budget Speech, an increase of one percentage point in the rate of the Québec sales tax (QST) as of January 1, 2011. It has decided, as part of the 2010-2011 Budget Speech, to raise the QST rate by a further percentage point as of January 1, 2012, bringing it to 9.5%.

In the case of a benefit related to the cost of operating an automobile, the amount of tax to be included in the calculation of the registrant's net tax corresponds, for the 2011 taxation year, to 5.4% of the value of such benefit. The 5.4% rate will be raised to 6% as of the 2012 taxation year.

The rate of the rebate will rise from 36% to 50% and the threshold value of a new residential unit acquired after 2010 at which no rebate is granted will be raised from $225,000 to $300,000. Consequently, the maximum rebate that may be obtained will be $8,772.

This specific zero-rating measure will be eliminated. This change to the QST system will apply regarding the supply of such a passenger transportation service made after June 30, 2010.

The regular rates of the fuel tax of 15.2 cents per litre of gasoline and 16.2 cents per litre of diesel fuel will be raised by 1 cent per litre per year until fiscal year 2013-2014. More specifically, these rises will apply on April 1 of each year, from 2010 to 2013.

The rates will continue to be reduced by 100% on the first 1,500 hectolitres of beverages sold in a calendar year, but will henceforth be reduced by approximately 85% on additional sales, up to 13,500 hectolitres.

Amendments will be made to the Act respecting the ministère du Revenu regarding major tax offences in order to raise the maximum prison sentence a court may impose for such offences to five years less one day. This measure will come into force on the date the bill giving effect thereto is assented to.

This new agency will replace the Ministère du Revenu as at April 1st, 2011.

Measures relating to:

• the transfer to a registered disability savings plan of an amount received from certain registered savings plans for retirement following the death of an individual who was the participant or the annuitant, as the case may be, by a child or a grandchild who was financially dependent on the individual immediately prior to his death subject to the reserve that the incorporation of these measures will be by reference to the federal tax legislation;
• the tax treatment of amounts paid, directly or indirectly, by a provincial government into a registered education savings plan or a registered disability savings plan;
• the disbursement quota that registered charities must satisfy;
• the addition of a requirement to be entitled to the deduction for employee stock options;
• the withdrawal of the election to defer taxation of a benefit arising from the exercise of a stock option granted to an employee of a corporation, other than a Canadian-controlled private corporation (CCPC), or a mutual fund trust, and the obligation to withhold tax at source;
• the temporary relief allowed individuals who elected to defer taxation of a benefit arising from the exercise of a stock option granted to an employee of a corporation, other than a CCPC, or a mutual fund trust, subject to the specific features described below;
• the non-taxation of part of certain benefits received under U.S. social security legislation;
• the changes made to the definition of "principal-business corporation" applicable as part of the flow-through share system;
• the changes made to the acquisition of control rules upon the conversion of a specified investment flow-through entity to a corporation;
• the changes made to the definition of "taxable Canadian property" and the correlative adjustments;
• the changes made to the relief mechanism applicable to foreign tax paid;
• the changes concerning the accelerated capital cost allowance on account of clean energy generation applicable to heat recovery equipment and distribution equipment of a district energy system;
• the changes concerning the capital cost allowance applicable to satellite and cable set-top boxes;
• the changes to specified leasing property rules.
• Changes will be made to the Québec sales tax (QST) system to incorporate, with adaptations based on its general principles and subject to specific Québec features, the federal measures concerning the application of the GST/HST to purely cosmetic procedures and the simplification of the GST/HST for the direct selling industry.

Where an individual, during a given taxation year and before 2015, disposes of securities regarding which a valid election to defer taxation of the benefit attributable to their acquisition was made, he or she may, for the purposes of Québec's tax system, make an election separate from the one he made for the purposes of the federal tax system concerning preferential tax treatment.