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What is the measure affecting tax credit eligibility criteria?

In its 2023–2024 budget, the Gouvernement du Québec announced a measure that could impact your eligibility for tax credits related to labour-sponsored funds. It would take effect in the 2027 tax year and target shares acquired after December 31, 2026.​​

True to its mission of helping Québec workers build decent retirements, the Fonds is actively working to ensure that everyone continues to enjoy access to 30% in tax credits[1]. While the measure is expected to come into force in the 2027 tax year,[2] discussions continue, and efforts to make changes are actively underway.

Savers who had a taxable Québec income exceeding $129,590 in 2025 would no longer be eligible for a 30% tax credit[1] on subscriptions to labour-sponsored funds in 2027.[2]

$129,590

To be eligible for 30% in tax credits in 2027,[1] your taxable income in 2025 must not have exceeded $129,590. This figure appears on line 299 of your Québec income tax return.

Two tax years in advance

To help you plan ahead, eligibility is determined two tax years in advance (e.g., in 2025 for 2027).

Taxable income threshold

The taxable income threshold changes every year. For 2028 contributions, the 2026 taxable income threshold will increase from $129,590 to $132,245.[1]

Government credits

If your taxable income exceeds the prescribed threshold, you won't be eligible for either federal (15%) or provincial (15%) labour-sponsored fund tax credits for that tax year[1].

Understanding the new measure as it currently stands

Deductions that reduce your taxable income

Let's say your employment income is $140,000 per year. After applying your $10,000 RRSP contributions and other deductions for workers, your taxable income shown on line 299 is $125,000. In this case, you may still be eligible for tax credits in the year 2027!

Sources of income outside your salary

Let's say your employment income is $110,000, but due to rental income from a second home, your taxable income on line 299 is $138,000. Unfortunately, if the new measure takes effect, you would not be eligible for tax credits in the year 2027.[1]

Maximizing your contributions in the first 60 days of the year

What if your taxable income on line 299 exceeds the maximum, and you are no longer eligible for credits in 2027?[1] You can still contribute in January and February (the first 60 days of the year) and claim all of the tax credits on your 2025 tax return, provided you meet the other applicable conditions for receiving this credit and do not claim more than the annual limit for 2025.

What if I don't qualify for the 30% tax credits?

Can I still contribute to an RRSP with the Fonds?

Of course! You can still contribute to an RRSP with the Fonds, but you won't be eligible for the 30% labour-sponsored fund tax credits.[1]

 Can I still make payroll deductions?

Yes. Payroll deductions remain a simple way to maintain your good savings habits. With each paycheque, you'll continue to gradually build retirement savings without even thinking about it. If applicable, employer contributions will also add to your retirement savings at no extra cost to you.

 Should I adjust my payroll deductions?

If the measure affecting access to tax credits takes effect and you are no longer eligible for them, confirm that your employer's payroll department has stopped applying the immediate tax deductions, meaning that they are no longer applying the 30%[1] tax credits directly to your paycheque.

Before making any changes, make sure you fully understand your tax situation and the options available to you.

 What other options does the Fonds offer?

To save for your retirement while supporting the local economy, you can also choose FlexiFonds savings products, in which 70% of assets are tied to Québec businesses.

Our FlexiFonds mutual fund advisors put their expertise and skill at your disposal with zero pressure and zero commission. They'll be happy to offer support if this change affects you.

What are the benefits of contributing to the Fonds?

Regardless of your eligibility for the 30% tax credits,[1] there are several reasons why you should still contribute to an RRSP with the Fonds. Here are just a few:

  • The Fonds remains a key player in your retirement savings strategy, with or without a tax credit.
  • Take advantage of standard RRSP deductions. Calculate your savings via payroll deductions using our online tool.
  • Benefit from employer contributions, if applicable.
  • Help support Québec businesses and local jobs through your savings.
  • Enjoy attractive long-term returns.
  • Achieve important life goals, such as buying a home, going back to school, or retiring comfortably with your accumulated savings.

Use My Game Plan for a clearer picture

My Game Plan

While we continue to advocate for access to these tax credits,[1] the Fonds is also providing workers with a powerful tool to help them plan their financial futures.

My Game Plan is a smart tool for planning retirement and life goals that helps you see things more clearly, make confident decisions, stay on track toward your goals, and continue investing with conviction.

Learn more
Legal Notes
1

The subscription for shares of the Fonds de solidarité FTQ may give rise to labour-sponsored fund tax credits. The tax credits amount to 30%, namely 15% at the Quebec level and 15% at the federal level, and are limited to $1,500 per fiscal year, which represents a $5,000 subscription for shares of the Fonds de solidarité FTQ.

Please read the prospectus before subscribing for shares of the Fonds de solidarité FTQ. Copies of the prospectus may be obtained on the Website fondsftq.com, from a local representative or at the offices of the Fonds de solidarité FTQ. The indicated rates of return are the historical annual compounded total returns including changes in share value and reinvestment of all dividends and do not take into account income taxes payable by any security holder that would have reduced returns. The shares of the Fonds de solidarité FTQ are not guaranteed, their value changes and past performance may not be repeated.

2

Starting in the 2027 tax year, an individual whose taxable income is subject to the highest tax rate for the reference tax year may no longer be eligible for the labour-sponsored fund tax credit on shares subscribed to after December 31, 2026. This measure stems from amendments made to the Taxation Act following the enactment, on May 7, 2024, of the Act to give effect to fiscal measures announced in the Budget Speech delivered on 21 March 2023 and to certain other measures.

About My Game Plan
My Game Plan is a tool for planning your finances offered by FlexiFonds de solidarité FTQ inc.

About FlexiFonds de solidarité FTQ
FlexiFonds de solidarité FTQ inc., a wholly owned subsidiary of the Fonds de solidarité FTQ, is a mutual fund dealer duly registered with the Autorité des marchés financiers. FlexiFonds de solidarité inc. acts as the principal distributor of the FlexiFonds funds and does not distribute the units of any other mutual fund.

FlexiFonds de solidarité FTQ Inc.
The units of the FlexiFonds funds are distributed solely in Québec by FlexiFonds de solidarité FTQ inc., a mutual fund dealer wholly owned by the Fonds de solidarité FTQ. FlexiFonds de solidarité FTQ inc. does not distribute the units of any other mutual funds. Management fees and other expenses may be associated with mutual fund investments. Please consult your advisor and read the prospectus and the fund facts documents before making an investment. The units of the FlexiFonds funds are not covered by the Canada Deposit Insurance Corporation nor any other government deposit insurer. The FlexiFonds funds are not guaranteed, their values change frequently, and past performance may not be repeated.