Two new fiscal measures are being added to the refundable tax credits for the construction or conversion of a ship.

Creation of a tax-free reserve

The first measure enables a Québec shipowner to set up a tax-free reserve to award the execution of construction, renovation and maintenance work on vessels of the shipowner's fleet to a Québec shipyard.

This measure applies in relation to a tax-free reserve set up after June 4, 2014, pursuant to a certificate issued by the Ministère de l'Économie, de l'Innovation et des Exportations after June 4, 2014.

Additional capital cost allowance of a vessel

Under the second measure, a Québec shipowner that awards work to a Québec shipyard can claim an additional deduction for the depreciation of a vessel.

This measure applies, for a taxation year, to the cost of work done by a qualified shipyard in relation to a Canadian vessel, pursuant to a contract a taxpayer enters with such a shipyard after June 4, 2014, but before January 1, 2024.

For more information, see pages 14 to 20 of the document entitled Additional Information on the Fiscal Measures of the Budget (PDF – 795 KB) tabled on June 4, 2014, by the Ministère des Finances.