A tax credit for aluminum smelters would have been too complex, according to Eric Girard
Several players in the aluminum industry complain that they were excluded from the tax credit for large investment projects in the last Minister Eric Girard's budget.
Quebec Minister of Finance, Eric Girard, denies abandoning the aluminum sector, which has not access to the new tax credit for large investment projects.
The Minister asserts that it would have been too complex to estimate the fiscal cost of the tax credit, if it had been offered to aluminum smelters. It was impossible for the Ministry of Finance to properly quantify the cost of the tax holiday for large investment projects in the aluminum sector, he explained during a visit to the Board of Trade of Metropolitan Montreal. So, if we are not able to calculate it, we exclude it.
The fact that electricity rates for aluminum smelters vary according to the price of aluminum would have complicated this estimate, according to him. Me, I'm trying to calculate the cost of a tax holiday that is [based on] electricity rates, which itself is [based on] aluminum rates. This is very difficult to estimate.
The ministry would not have had time to find an alternative to include the aluminum industry, the minister said during a press scrum on the sidelines of the conference. A budget has a deadline. There are times when economic forecasts are shut down. Then, we close the financial framework. Then we make the decisions.
“At the time we had to make this decision for the tax holiday for large investment projects, we could not properly quantify the number of projects that would be involved, their cost. »
— Eric Girard, Minister of Finance
The decision of the Legault government has disappointed several players in the aluminum industry. Quebec is no longer alone in the forefront with its low carbon footprint aluminum, and we must ensure our future by remaining competitive, reacted the president and chief executive officer of the Association de l' ;aluminium of Canada, Jean Simard, earlier this week after the unveiling of the budget.
Mr. Girard denies abandoning this industry, a major employer in the Saguenay-Lac-Saint Jean region. Since we love the aluminum sector and it's strategic, we put a footnote that says: “When we are better able to calculate it, most likely than ;they will be eligible".
The minister acknowledged that the state has a role to play in supporting strategic sectors, such as aluminum, which are capital-intensive but have long-term benefits. In a scrum, he replies that he would not pass judgment on the most appropriate intervention. Each project is analyzed on a case-by-case basis.
The tax credit for large investment projects is one of the key economic measures in the provincial budget, unveiled on Tuesday. The credit of 15% to 25%, depending on the region, is intended for investment projects of at least $100 million.
Mr. Girard also opened the door to other tax cuts on the sidelines of his speech, but these could not occur before reaching a balanced budget after payment to the Fonds des generations, scheduled for fiscal year 2027-2028.
Once that's done, we'll see where we are. […] Quebec remains the highest taxed place in North America, despite this tax cut.
“There would be other gestures that could be made, certainly. »
— Eric Girard, Minister of Finance
The promise to lower taxes is not unanimous and its detractors made several public outings before the unveiling of the provincial budget.
For sometimes different reasons, economists, civil society groups and unions have asked the Legault government to abandon the Coalition avenir Québec's election promise. Some plead in favor of additional investment in public services or the fight against climate change, others would like us to maintain payments to the Generations Fund to accelerate the reduction of the public debt.
During his speech to an audience of members of the Montreal business community, Mr. Girard defended the tax cuts adopted by his government which would have the support of the silent majority.
All the columnists are against me. Let's be serious, the silent majority… I'm going to the public market. I am going to get coffee. Everyone congratulates me: “Thank you for the tax reduction”. I open the newspaper. "Oh boy", what a bad idea to lower taxes!