Quebec Premier Christine Fréchette is expected to announce Monday the abolition of provincial sales tax on a range of grocery and pharmacy products, in a move that would save households roughly $50 a year and cost the provincial treasury $100 million annually.
The coming change was originally reported by Journal de Quebec, who stated that the cuts are to apply to a range of products, such as fruit, vegetables, and basic necessities such as toilet paper. The tax cut however is not expected to apply to unhealthy food, such as chips or candy, or prepared foods.
The cut would make Quebec the second Canadian province to eliminate its provincial sales tax on most grocery items, after Manitoba.
It would also push Fréchette well past the spending cushion her Finance Minister set aside for her. When Eric Girard drafted his budget, he carved out $250 million a year for the new CAQ leader to fulfil commitments.
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The grocery tax cut brings Fréchette’s running total to roughly $330 million, about $80 million over budget.
The earlier draws on that fund include $140 million to reimburse a significant portion of real estate transfer duties, known as the taxe de bienvenue, for new buyers; $50 million in tax relief for small and medium-sized enterprises; and $40 million to reimburse the carbon tax to farmers.
Girard noted in his budget that if the new premier needed to exceed the $250 million allocation, she could draw on contingency funds.
Further details of the cuts are expected to be announced Monday.
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