Insurance Premium Tax: What Will Change on January 1, 2027

Starting January 1, 2027, the insurance premium tax rate in Quebec will increase from 9% to 9.975%. This change, announced by the Government of Quebec as part of the 2025-2026 budget, aims to harmonize this tax with the Quebec Sales Tax (QST) rate.

Concretely, this change could affect the amount of your upcoming insurance payments. But please note: this is a tax increase, not an increase in your insurance premium.

The team at Malouin Assurance explains what you need to know to prepare for this change.

Currently, the insurance premium tax rate is 9%. As of January 1, 2027, it will increase to 9.975%, matching the QST rate.

It is important to understand that the insurance premium tax is separate from the QST. Indeed, QST and GST do not apply directly to insurance premiums. It is specifically the tax rate applicable to insurance premiums that will be modified.

Key dates to remember:

• Until December 31, 2026: 9% rate on premiums paid in 2026.
• As of January 1, 2027: 9.975% rate on premiums paid from this date onward.

The key point to remember: the date the payment is received determines the applicable rate, not the invoice issuance date.

The effect of this change will depend on your insurance premium and payment method.

To better understand, let’s take the example of an insurance premium of $1,000, before applicable tax.

In this example, the difference is $9.75 for a $1,000 premium.

The actual amount of adjustment will depend on your premium and affected payments. This example is for illustrative purposes only to show the effect of the rate change.

If your billing is handled by Malouin Assurance and you have a remaining balance to pay, here is what you need to know:

• A payment received by December 31, 2026 at the latest will be subject to the 9% rate.
• A payment received as of January 1, 2027 will be subject to the 9.975% rate, even if your invoice was issued in 2026.
• If a payment made in 2026 is refused and the payment is finally received in 2027, the new rate of 9.975% will apply.

If you currently have a balance due, we recommend making your payment by December 31, 2026 at the latest, whenever possible.

Do you pay your insurance in multiple installments?

If your installment schedule crosses into the new year, the applicable rate may vary depending on the receipt date of each payment.

For example, for an invoice payable in three installments:

• November 2026: 9% rate.
• December 2026: 9% rate.
• January 2027: 9.975% rate.

It is therefore useful to take this change into account when planning your next payments.

If your insurer bills you directly, notably through monthly pre-authorized debits, premium payments scheduled for January 2027 onward will be adjusted to reflect the new 9.975% rate.

Your insurer will also send you a communication regarding the change and the adjustments applicable to your payments. We invite you to pay attention to the information they provide.

No. It is important to distinguish between the two.

Your insurance premium is the amount charged for your coverage. The insurance premium tax is an additional amount calculated based on the applicable rate.

The increase from 9% to 9.975% does not, in itself, constitute an increase in your insurance premium. It is a tax adjustment that may increase the total amount payable.

That said, your premium could undergo a separate adjustment upon renewal of your contract, depending on your situation and applicable conditions. Such a change would be independent of this tax change.

The change will take effect on January 1, 2027, but you can check your billing method and upcoming payment dates right now.

If you receive your invoices from Malouin Assurance and have a balance due, consider making your payment before the end of 2026, when possible, so that it is subject to the current 9% rate, subject to the rules applicable upon receipt.

Do you have questions about your payments, billing, or the impact of this change on your file? The team at Malouin Assurance is here to assist you and clarify any details.

To view the official announcement and details from the government, visit the Revenu Québec page on the standardization of the insurance premium tax rate.