QUEBEC — Faced with a growing public uproar, the government has scrapped plans to increase the age for seniors to be eligible for an income tax credit from 65 to 70.
Quebec Finance Minister Carlos Leitão made the announcement Wednesday after emerging from a meeting of the Liberal caucus.
“The reform was generating lots of concern,” Leitão said. “The concern was not based in fact but it was real. There were a lot of people worried. Some people were convinced the government was grabbing $500 out of their pockets.
“What’s clear is that this was not going over well. And I didn’t want to fuel this concern.”
Included in the 2015-2016 provincial budget, the measure was to take effect in the 2016 fiscal year which means it is on tax forms this year.
The reform would have seen the age of admissibility for the credit, which can represent $500 a year, bumped to 66 for 2016, 67 for 2017, 68 for 2018, 69 for 2019, and 70 in 2020.
The government argued the change was necessary because the life span of the average Quebecer is growing and the tax credit has been on the books since 1972. A coalition of senior groups, however, said 500,000 seniors would no longer be eligible for the tax break by 2020.
On the other hand, changing the tax credit would have generated $267 million more in the government treasury over the next four years.
The government’s back-pedal took two weeks. After initially defending the decision, Leitão last week said the next budget, which is due mid-March, would include compensatory measures.
On Wednesday, he scrapped the plans and said the Finance Department would be going back to the drawing board.
“It may have been a communications problem on our part,” Leitão said. “I don’t think the impact was poorly evaluated but they were certainly poorly communicated.
“I don’t think it was a bad idea but clearly there was a great deal of upheaval. There was a great deal of worry.
“They were under the impression they would lose hundreds of dollars and everybody would be affected by this so it was difficult for us to try and explain it clearly so the best way was to just end it completely and go back to square one.”
Leitão, however, said another tax credit designed to encourage senior workers to stay on the job given Quebec’s chronic labour shortage will stay in place.
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