How shifting tax rates and fees will affect Quebecers' bottom line in 2016

Quebecers will see the price of several services go up in 2016, ranging from daycare to transit passes. Here's a rundown of what to expect.

Daycare fees and property taxes up in new year, but middle class gets tax cut

Adjustments to MSP premium thresholds mean some couples will be paying an additional $168 per year, while single parents and low income families will enjoy savings. (Getty Images/Gallo Images)

Quebecers will see the price of several services go up in 2016, ranging from daycare to transit passes.

But there will also be tax relief for some residents thanks to changes by the federal government.

Here's a rundown of what to expect, with the good news first.

Cuts for the middle class

Justin Trudeau's tax cuts go into effect on Jan. 1. (Adrian Wyld/Canadian Press)

The federal Liberal government's federal tax cut for the middle class goes into effect on Jan. 1. The income tax rate will drop to 20.5 per cent, down from 22 per cent, for taxable earnings between $45,282 and $90,563. The rate on all income earned beyond $200,000 will rise from 29 per cent to 33 per cent. 

​SAAQ insurance rates chopped

The SAAQ will reduce vehicle licence and registration fees in 2016. (Paul Chiasson/Canadian Press)

Vehicle insurance rates are going down substantially. For a driver who owns a passenger vehicle, this means $65 in savings — the annual licence fee will go from $64 to $55, and car registration will go from $120 to $64.

Daycare fees

Parents with children in publicly-funded daycares in Quebec will have to pay according to their annual gross income. (Stock Photo)

The rate of $7.30 a day per child remained in effect through the end of 2015, but when families prepare their annual income tax declarations this year, those who make more money will have to pay extra. Starting January 1st, families with a total income of less than $55,000 will pay only the base amount of $7.55 a day per child. Additional fees will climb as high as $20.70 per day per child for families whose total annual income is more than $150,000.

Transit fees

The STM won't be raising fees, at least for the first half of 2016.

The STM, Montreal's public transit authority, announced earlier this year it will freeze fares for at least the first half of 2016. The AMT, Laval and Longueuil transit rates, however, will all see increases.

Montreal municipal tax rates

Property tax increases for 2016 vary by borough. (Ryan Remiorz/Canadian Press)

Montreal residential property owners will see an average increase of 1.9 per cent on their property taxes as part of the 2016 budget, but the specific rates vary widely by borough.  For the average single family home – valued at $431,044 –that means an increase of $75 in property taxes next year. Go here for a breakdown of the rates by borough.

Stricter limit for TFSA

Canada's Finance Minister Bill Morneau has cut down on the maximum annual TFSA contribution. (Chris Wattie/Reuters)

The annual contribution limit for tax-free savings accounts will be $5,500, instead of the $10,000 the previous federal government had implemented for 2015. Check out an analysis of the changes here.


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