2008-2009 BUDGET - Press release 2 of 6 - 2008-2009 Budget Speech - REWARDING INVESTMENT TO STIMULATE PRODUCTIVITY

    QUEBEC, March 13 /CNW Telbec/ - "We must make it possible for Québec
firms to adapt to economic changes marked by the new reality of parity between
the Canadian and U.S. dollars and by increasingly stiff international
competition. This budget creates a fiscal environment that has never been more
favourable to investment and productivity improvement," declared Monique
Jérôme-Forget, Minister of Finance, Minister of Government Services, Minister
Responsible for Government Administration and Chair of the Conseil du trésor,
in the 2008-2009 Budget Speech.
    The 2008-2009 Budget encourages Québec businesses to accelerate their
investments through a series of measures, including:

    - immediate elimination of the tax on capital for all manufacturing
      companies, which will encourage 14 300 more firms to invest and
    - the introduction of a new investment tax credit for the purchase of
      manufacturing and processing equipment. The tax credit will be at least
      5% for all companies, but will be raised on the basis of the remoteness
      of the regions. Accordingly, it will be 20% for the Saguenay-Lac-Saint-
      Jean and Mauricie regions and the three regional county municipalities
      that benefit from the tax assistance for resource regions, 30% for the
      Bas-Saint-Laurent region and 40% for the Gaspésie-Iles-de-la-Madeleine,
      Côte-Nord, Abitibi-Témiscamingue and Nord-du-Québec regions;
    - additional funding of $50 million over five years to support regional
      county municipalities that are going through economic hard times;
    - introduction of a refundable tax credit for new information technology
      companies corresponding to 30% of the salaries for jobs related to
      innovative activities, such as consulting services and e-commerce
      solutions design. The tax credit will be available throughout Québec.

    "Some of these measures draw largely on the work of the Task Force on Tax
Assistance for the Resource Regions and the New Economy. I want to thank the
members of the task force: economists Robert Gagné, Luc Godbout and
Guy Lacroix. They had a difficult mandate. Yet they managed to submit
recommendations to stimulate economic growth, emphasized the Minister.
    The budget also contains other measures to increase productivity,

    - high-speed Internet access in all regions of Québec under the new
      Communautés rurales branchées program;
    - creation of the Fonds du patrimoine minier, into which will be paid a
      portion of mining duties to attract more businesses to Québec;
    - an investment of $2 million to create a national mining institute and
      implement other training measures;
    - an investment of $60 million over five years to better support the new
      generation of farmers and contribute to the modernization of businesses
      in the food processing sector;
    - more money to finance and disseminate culture, through an additional
      investment of $10 million in Placements Culture, which will bring the
      government's contribution to $25 million since the program's inception
      in 2005.

    "A number of measures I am announcing in this budget were inspired by the
directions proposed by the Task Force on Business Investment chaired by
economist Pierre Fortin, accompanied by Andrée Corriveau and Jean Boivin. I
salute the Task Force's work and the quality of the report I am making public
today," said the Finance Minister.
    "We have demonstrated our ability to be world leaders in areas as
competitive as the aerospace industry, pharmaceutical and biotechnological
research, health sciences and digital technologies. Together, we can and we
must succeed. This budget gives us the means to do so," she concluded.
    -%SU: TAX
    -%RE: 1

For further information:

For further information: Catherine Poulin, Press Officer, Office of the
Minister of Finance, Minister of Government Services, Minister Responsible for
Government Administration and Chair of the Conseil du trésor, (418) 643-5270,
(514) 873-5363, www.finances.gouv.qc.ca

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