Québec Increases Tax on Insurance Premiums

Québec is increasing the tax rate applicable to insurance premiums from 9.0% to 9.975%. The revised tax rate will apply to all taxable insurance premiums paid on or after 1 January 2027.

Background

The change forms part of the Québec government’s broader fiscal measures in Bill 99 (2025, chapter 27), which received Royal Assent on 28 October 2025.

The increased tax rate will apply to all taxable insurance premiums paid on or after 1 January 2027 and is expected to increase the cost of affected insurance policies.

Key details

Bill 99 increases Québec’s Insurance Premium Tax (IPT) rate from 9.0% to 9.975%. The IPT is levied on most insurance premiums in Québec. This includes group benefit plans, regardless of the funding arrangement, including non-refund, refund and Administrative Services Only (ASO) arrangements. A list of exemptions from IPT is available on Revenue Quebec’s website here (opens a new window).

The measure is intended to harmonize the IPT rate with the Québec Sales Tax (QST) rate, which has remained at 9.975% since 1 January 2013.

The new IPT rate applies to taxable insurance premiums paid on or after 1 January 2027, regardless of when the underlying insurance contract was issued or when the premium became payable.

Employer action: ACT

Employers with affected insurance plans should expect premium adjustments to be reflected in billing statements and invoices issued from January 2027 onward. Self-administered employers that calculate and remit insurance premium tax directly should update their processes to ensure the new 9.975% rate is applied from 1 January 2027.

Where employees contribute toward the cost of insurance benefits, employers may need to adjust payroll deductions to reflect the higher tax rate.

Employers should review insurer communications and billing statements to identify any resulting adjustments to benefit costs. The overall impact is expected to be limited, with only a small increase in premiums for affected plans.

Written in collaboration with

Patrick Malloy

BFL CANADA Benefits (Lockton Global Partner)

pmalloy@bflcanada.ca (opens a new window)

Further Information

Bill 99 - Assented to (2025, chapter 27) | Québec Official Publisher (opens a new window)