Quebec budget | $500 for 6.4 million Quebecers

Six months before the general election, the Lego government will pay $500 to the vast majority of Quebecers, a $3.2 billion gift paid for with much more government revenue than expected in 2021.

Published at 16:12

Charles Lecavalier

Charles Lecavalier

This amount will compensate “from now on” citizens who are threatened with a rise in the price of housing, food and transport. All adults with an annual income of $100,000 or less after taxes will be eligible: that’s over 90% of the population. The amount will be paid automatically to everyone who filed a tax return in 2021.

The high inflation rate, set to reach 4.8% in 2022, “represents a significant additional burden for low-income households,” but the Lego government has decided to take measures aimed at the wealthy as well. Why ? “All Quebecers are affected by rising inflation,” Treasury Secretary Eric Girard explained.

Only 400,000 taxpayers will not be eligible for the $500 check.

His government can afford to replenish the treasury in an election year due to higher-than-expected revenues in 2021. The state raised $9.4 billion more than expected a year ago due to “good economic performance,” of which $3.2 billion went into the pockets of taxpayers, the exact cost of paying a check of $500.

“Quebecs finance the checks themselves,” lamented liberal financial critic Carlos Leitao, who condemned this “electoralist” budget. “We should have been much more focused. Of course, there are groups that are more vulnerable and affected by the rising cost of living, and we have allocated $500 each. I don’t find it particularly brilliant,” Leitao said. More bluntly, Quebec Deputy Solider Manon Masset believes Mr Lego is “rolling in checks” to “go to the box office” on October 3rd.

Russian invasion

After the 2020 pandemic, Minister Girard’s budget is shaken by another crisis: inflationary pressures are due, in part, to Russia’s invasion of Ukraine. Forecasters of the Ministry of Finance expect that it will last until 2023. It is noted, for example, that “the war in Ukraine has already led to an increase in energy prices.” With the threat of a recession looming, Mr. Girard has included a $2.5 billion “economic risk reserve” in his financial system for the current year to protect himself.

But in the short term, public finances are all right. Real GDP grew by 6.3% in 2021 after declining by 5.5% in 2020 and will stand at 2.7% in 2022. Quebec’s economy has returned to pre-pandemic levels, unlike Ontario.

Last March, the Treasury Department projected a structural deficit of $6.5 billion this year. Ultimately it will be 2.8 billion. Thus, Quebec is two years ahead of its timetable for returning to a balanced budget, even if Minister Girard still believes this will be achieved by 2027-2028. This year, the total deficit, including payments to the Generations Fund, is $6.5 billion, but it will shrink rapidly in the coming years. As for the weight of the debt, it is “under control in the long term.”

Tax cuts

“We see a return to a balanced budget on the horizon,” Finance Minister Eric Girard said. Prime Minister François Legault hinted last week that tax cuts could be found on the Coalition avenir Québec election platform. Mr. Girard is not closing the door to tax cuts. This, he said, requires a “balanced budget,” not necessarily achieving it.

In the longer term, more limited economic growth with a 1.5% annual increase starting in 2024. To completely eliminate the structural deficit without the help of Ottawa, “an annual growth of 2% is required,” Minister Girard admitted. The Lego government, which has made bridging the wealth gap with Ontario a hobby, also sees the Canadian economy growing faster than Quebec’s in 2022 and 2023.

In addition to helping individuals, Mr. Girard is involved in the main tasks of the state, namely health, education, the economy and the environment. For details, Quebec goes there with a strategy striptease. Environment Minister Benoît Charette will present an update to his green economy plan with a $1 billion bonus in a few weeks, as will Health Minister Christian Dube and his $5.2 billion “re-foundation”. The public sector will receive 1.2 billion over five years, which will be known later.

In higher education, the 13% spending increase notably includes the Quebec Perspective Scholarships announced in the fall. In education, the growth of 5.4% is explained, for example, by the expansion of the tutoring program.

Opposition reaction

This is purely a pre-election budget without a vision. The CAQ shows us that its real priority is not the welfare of Quebecers, but re-election. François Legault looks no further than October 3rd. He might even rename this budget: Election Horizon.

Carlos J. Leitao, Quebec Liberal Party

With his check, there are those who will buy high-spec New Balance, and others may have time to buy shoes for their children when the groceries are paid for. […] This budget was to meet the needs of the people of Quebec. […] we understand that this is a sham.

Manon Masset, Solidarity Quebec

Presumably, the limits of electoralism are being pushed to an unprecedented level. If you’re wondering what the criteria are for setting a $100,000 maximum income for a $500 check, the answer is that it allows you to reach 6.4 million voters.

Paul Saint-Pierre Plamondon, Parti Québécois

François Legault comes to take a few billion dollars extra in taxes and taxes out of your pockets, and then thinks you’ll be grateful to him when he hands you a check for $500 on the eve of the election.

Eric Duhem, Quebec Conservative Party

With Fanny Levesque Press

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