Quebec economic update

Critics denounce government spending after Quebec economic update

Peter Black, Local Journalism Initiative reporter

peterblack@qctonline.com

Finance Minister Éric Girard has come up with $2.1 billion in new spending over five years while at the same time vowing to balance the province’s budget by 2029-30.

Girard made the commit- ments as part of a sweeping package of spending and tax measures in his economic update delivered on Nov. 21.

The increased spending is targeted at priority areas, including forestry, housing, public transit and public safety.

In presenting the update in the National Assembly, Girard said, “Since 2018, the strong performance of our economy has made it possible to narrow the gap in living standards with Ontario. This catch-up is supported by our government’s action to protect Quebecers’ purchasing power and support the growth of our strategic sectors.”

The largest single chunk of new spending, nearly $1.2 billion over five years, is earmarked for “supporting the transition of public transit bodies and contributing to the vitality of Montreal and the Capitale-Nationale [region].”

Some Quebecers will see some modest tax relief as of the new year. The government is indexing personal income tax parameters by 2.85 per cent, which amounts to a $5.2-billion tax cut overall over five years.

On the other hand, some older residents will be losing a tax benefit with the move to increase the age eligibility threshold for a tax credit for working seniors from 60 to 65. Quebec will save $877 million over five years and nearly 200,000 taxpayers will be hit with an average $973-per-year increase.

Families will see a modest benefit, with family allowance payments increasing to $3,006 a year, a boost of $83.

The economic statement drew harsh reaction from political opponents. The Quebec Liberal Party, for example, dismissed Girard’s optimistic forecast.

Opposition finance critic Frédéric Beauchemin said in a statement that Girard’s projection of a doubling of economic growth in the coming months is not realistic, “with significant tariff increases expected, an economic slowdown is more likely.”

Beauchemin said, “The minister inflates the government’s anticipated revenues beyond the private sector average to maintain his deficit, despite substantial cuts. This lacks credibility.”

Official Opposition Leader Marc Tanguay added, “[Premier] François Legault promised prosperity, but instead, he delivered the decline of Quebec’s financial capacity. With his economic update, the CAQ demonstrates its incompetence in managing public finances.”

The second Opposition, Québec Solidaire (QS), denounced the government for not keeping pace with spending increases for social services.

QS treasury board critic Vincent Marissal said in a statement, “There is only one person left in Quebec who still seems to believe that we are not in a period of austerity and that is Éric Girard. It is now crystal clear. The CAQ is cutting spending increases, which will necessarily affect services to citizens as a whole. Quebec has already played this scenario a few years ago and it leaves a bitter taste.”

The Parti Québécois attacked the government for excessive spending. Finance critic Pascal Paradis said in a news release, the CAQ government “has an easy time spending for electioneering: we have counted more than $5 billion in frivolous spending and decisions that have directly affected Quebec’s financial capacity. From $7 million to the Los Angeles Kings to $710 million in Northvolt, including millions in loans to insolvent or hard-to-justify companies, such as jewellers or airships. Wasting Quebecers’ money has a price!”

The Quebec Conservative Party, which does not have a seat in the legislature, went even further, calling for Girard to resign. Finance critic Adrien Pouliot said in a statement that Legault should “reshuffle his cabinet as quickly as possible in order to remove Éric Girard before he causes further damage to our public finances and to Quebec’s financial credibility.”

On a more local level, Quebec City Coun. Jackie Smith said in a release, “Despite the significant deficit it is forecasting, this government has not been able to invest where it was needed. We are experiencing a housing crisis, a homelessness crisis and a public transit crisis. We are disappointed that this spendthrift government is leaving only crumbs for our sectors in crisis.”