On the eve of the federal budget’s release, Quebec is demanding compensation for Ottawa’s “mega-deduction,” which will cost the province $1 billion a year. “I’ve already told you that this mega-deduction is giving me headaches,” Quebec Finance Minister Nicolas Marceau said during a news scrum on Wednesday. “The Tylenol I’d like to see in tomorrow’s budget is an increase in health transfers that could help alleviate the pressures this will impose,” he noted. Canadian Prime Minister Mark Carney announced the “productivity mega-deduction” on Sept. 15. It is intended to let businesses deduct the full amount of expenditures on goods, such as machinery, construction materials, or new technologies. In a news release issued Wednesday, the Quebec government lamented that this “mega-deduction” was announced, “unilaterally, without consultation.” “If the Quebec government were to harmonize with this federal measure, it would result in a significant shortfall in public revenues,” the statement emphasized. In this context, Marceau is calling on the federal government to do its part and address the growing needs in health care. He points out that the agreement on health transfers expires next spring. “In particular, we would like to see a five per cent minimum growth rate for health transfers,” the minister stated. “Furthermore, there are sector-specific agreements (...) in mental health, etc. (...) We would like to see them renewed, but also incorporated into the base of the health transfer.” With regard to asylum seekers, Quebec is demanding reimbursement by March 31, 2027, for all expenses it incurred in 2024. “This is an issue that has been dragging on unnecessarily,” said Quebec’s finance minister, noting that the bill now totals $690 million. He is calling for the creation of a permanent mechanism so that “we don’t have to renegotiate every year to figure out how we’re going to be reimbursed.” Quebec is also requesting funding for its infrastructure—“a genuine, unconditional lump-sum transfer” — which would allow it to work “on its priorities.” Finally, Marceau reiterated that during negotiations with Washington, “supply management must not be subject to any concessions.” “It is non-negotiable,” he insisted. This report by The Canadian Press was first published in French on Nov. 4, 2026.
