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FEATURE ARTICLE
Conclusion
In all these scenarios, the labour-sponsored fund offers
a benefit in the very first year, but that benefit is bigger
when there is sufficent RRSP contribution room to
invest the full amount of the tax return in the RRSP.
The TCLSF compensates for the lower return, but not
forever. To be sure to take full advantage of the credit,
it is recommended that contributors withdraw the
money from the fund as soon as possible, generally in
retirement. Unlike in most provinces, where the funds
can be withdrawn after eight years without losing the
credit, Québec only allows the funds to be withdrawn
in specific situations, such as on retirement.
There are other circumstances where the funds
can be redeemed without losing the tax credit, but
the taxpayer must liquidate all other investments
first, including RRSPs. For example, a job loss,
an involuntary reduction of usual working hours,
leave due to a temporary disability, separation or
divorce, reduction of net income for six months
for a self-employed worker and, finally, to cover
unexpected medical costs not covered by the
Régie de l'assurance maladie du Québec.
Investing in a labour-sponsored fund encourages
the local economy. The credit was supposed
to have been cancelled in 2017, but luckily the
federal Minister of Finance reinstated it at 15% in
2016. Without that credit, it would be harder to
encourage taxpayers to invest and participate in
the economic development of their province.
Scenario A Scenario B Scenario C
Without LSVCC With LSVCC Without LSVCC With LSVCC Without LSVCC With LSVCC
RRSP contribution $1,666.67 $3,333.33 $1,000.00 $1,000.00 $– $–
Refund ($666.67) ($2,333.33) ($400.00) ($700.00) $– $–
Net cost
Non-RRSP
$1,000.00 $1,000.00 $600.00 $300.00 $– $–
LSVCC savings $– $– $– $– $– $1,000.00
Traditional savings $– $– $400.00 $700.00 $1,000.00 $300.00
Régime de rentes du Québec
Unités de formation : 3 UFC
Comptes de retraite immobilisés
et fonds de revenu viager
Unités de formation : 2 UFC
Régime volontaire d'épargne-retraite
Unités de formation : 2 UFC
Régimes de retraite du secteur public
(RREGOP et RRPE)
Unités de formation : 3 UFC
Pour vous inscrire ou pour connaître le
programme et le coût de chaque formation,
consultez notre site Web.
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retraitequebec.gouv.qc.ca/formations