Quebec budget kinder to business, delays work on mining royalties

Tue Nov 20, 2012 5:38pm EST
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* New separatist budget more conciliatory than expected

* Analyst says no longer leaves anti-business impression

* Tax holiday for targeted investments

* Sets higher tax brackets for upper-income people

By Louise Egan

QUEBEC CITY, Nov 20 (Reuters) - The Canadian province of Quebec promised on Tuesday to overhaul its system of mining royalties next year in a budget that was otherwise seen as more business-friendly than expected.

After winning a September election, the separatist Parti Quebecois (PQ) ruffled feathers in the corporate sector with talk of increasing the financial burden on wealthy households and on companies in order to pay for tax breaks for low and middle-income households, as well as to cover the cost of reversing the previous Liberal government's decision to raise university tuition and electricity rates.

While the PQ, which has a minority of seats in the legislature, says it still plans to follow through on some of those promises, it scaled back those ambitions somewhat in a budget seen as more conciliatory.

"If we listened to their promises during the election campaign and then look this budget, it's not the same government," said Carlos Leitao, chief economist at Laurentian Bank.   Continued...