Five questions to the great treasurer of Quebec

Taxation is an arid subject that it is hard to imagine being the source of inspiration for a popular song or an exciting reality show. However, it affects us daily, from receiving his paycheck to buying gas for his car.

It is enough to be interested a little in the figures to discover fascinating phenomena. I’ll give you an example heard Friday at noon when the Research Chair in Taxation and Public Finance unveiled the 2022 edition of its Assessment of taxation in Québec.

We learn that tax revenues in Quebec, in 2020, reached $174 billion. This is the sum of all you have paid in federal tax, provincial tax, sales tax, property tax and contributions to the Quebec Pension Plan. If income tax has increased (by 3.2%), thanks to the payment of the CERB in particular, sales taxes have instead fallen by 7.5%.

Why ? Because restaurant dining rooms have been closed for several months, among other things. We have therefore bought a greater part of our food at the grocery store and these products are not taxable (with some exceptions).

This forced change in our purchasing habits has caused the explosion of the cost of “zero-taxing basic foodstuffs”, that is to say not taxing vegetables and meat. The bill reached $2.5 billion for the state. European countries have undoubtedly been less affected by this financial consequence because food sold in supermarkets is taxed there, which would be “unthinkable” here, underlined the holder of the Chair, Luc Godbout, from the University of Sherbrooke. .

In 2019, tax revenues in Quebec were $1 billion higher.

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The Minister of Finance, Eric Girard, also took part in the event and took the opportunity to answer questions from the public.

Quebec will help households financially between now and the end of January to deal with inflation. Do you envisage other measures if we reach a level as high as that of the United States (7%)?

I had the opportunity to work at the Bank of Canada and it is important to remember that controlling inflation in Canada is the responsibility of the central bank. It has the mandate to bring inflation back to between 1% and 3% and they said we would be there in the second half of 2022. Everyone has their responsibilities. If inflation does not return to more moderate levels within a year, I will watch [l’idée d’une aide additionnelle]. It must also be said that we will have an improvement in inflation, it is mathematical when we look at the energy component. It is obvious that this component will disappear because energy prices in the first quarter of 2022 are lower than last year’s prices.

Could you allow older workers to stop contributing to the Quebec Pension Plan to encourage them to stay in the labor market?

The Pension Plan is a self-funded plan, so as soon as we allow certain people to no longer contribute, we will have to increase the contributions of others. And it is employers and employees who contribute. So, no, that’s not our intention. We heard the suggestion, we studied it. But do we intend to do that? No, it’s clear.

In Canada, net worth is quite concentrated. Would that justify raising taxes on the wealthy?

In Quebec, the famous 1% pays more than 19% of taxes. So I would say that in Quebec, since our tax burden is high, all of the cohorts that pay tax pay too much tax. So no, I don’t believe a group has to be targeted to be taxed [davantage].

Is reducing the tax burden part of your medium- and long-term objectives to bring it closer to the Canadian average?

Sure ! We would like to have the same level of wealth as the Canadian average, we would like to no longer receive equalization, we would like to have the same tax burden. All that will take time and it is the sum of the gestures that will bring us there. It’s important to stay the course. During the crisis, we really made a major effort to ensure that our emergency actions were consistent with what we wanted to do in the long term.

What is your long-term vision on prioritizing debt reduction versus funding other state missions and priorities such as the climate crisis?

I think that reducing the weight of the debt enables us to respond precisely to these other priorities: fight against climate change, ensure the financing of State services, aim to reduce the tax burden over time. So it is important. Personally, I associate sound management of public finances with good governance of state affairs. Reducing the debt burden over time allows us to have a double A credit rating, to borrow at competitive rates, to reduce the debt burden, to cope with bad weather. We have just had the worst recession since the Second World War and we managed to absorb it, to give the means to the health service, we managed to help our businesses. So it’s extremely important to have a good track record.

The Minister’s remarks have been edited for brevity.