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Godbout report recommends lower income taxes; higher QST, tax on tobacco, alcohol

WATCH ABOVE: Financial expert Luc Godbout’s report on Quebec’s taxes was released on Thursday with 71 recommendations, including reducing personal income tax and hiking PST. Rachel Lau has details.

QUEBEC CITY — Some big changes may be in the works for Quebec taxpayers.

After eight months of deliberation, the Quebec Taxation Review Committee released 71 recommendations to better manage tax dollars.

“It is an overall view of taxation in Quebec,” said Carlos Leitao, Quebec’s Finance Minister. “It is clear that any government could not implement all those recommendations.”

One thing is for sure, there will be no increase in personal income tax.

“I’m open to reducing personal income tax, which is the most damageable, the most inefficient way for a government to raise revenue,” said Leitao.

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The Godbout Commission suggests boosting the QST to 11 per cent – something the Parti Quebecois is against.

“This proposal was in the air for quite a while now,” said Nicolas Marceau, the PQ’s finance critic. “What I’m afraid of is that this report could justify the government raising the sales tax.”

Godbout recommends a one per cent “eco-tax” on fuel over five years.

“It’s collecting more tax revenue in a more efficient, more competitive and more equitable manner,” said Carole Vincent, an economist with the Commission.

“It is a major reform.”

The committee also recommends increasing the taxes on tobacco and alcoholic drinks like beer. But, not everyone things that’s a good idea.

“The efficacy of the fiscal policy of tobacco has achieved their limit,” explained Yves-Thomas Dorval, president of Quebec’s Employers Council. “More taxes will just bring more contraband so there is no improvement for fiscal return in Quebec.”

The province’s heaviest consumers of electricity will see their Hydro bills increase.

Dorval sees some positive elements in the report.

“The intention is to boost economic growth, boost GDP in Quebec, so those are good orientations,” he told Global News.

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Nevertheless, the opposition is fuming.

“We are very worried about the Liberals.”

“Too many times the middle class has seen tariff and taxes increase under a Liberal government without seeing a corresponding decrease of a fiscal burden,” said Francois Bonnardel, CAQ finance critic.

The Liberals insist they will proceed with caution.

“Give us time to discuss,” Premier Philippe Couillard said.

“Our decision will follow.”

The provincial budget will be tabled on March 26.

Some elements of the Godbout report are expected to be reflected in Leitao’s second budget.