Demographic changes | Quebec will receive 90 million less in federal transfers this year

(Ottawa) Quebec is seeing nearly $90 million cut this year in federal transfers which are allocated per person due to demographic changes in the country which are influenced by the Trudeau government’s ambitious immigration policies.

The Press learned that the federal Ministry of Finance informed Quebec in October that it would receive a little less real money in federal transfers following a review of the demographic changes that occurred in all the provinces until 1^er June 2023.

Result: Quebec will get $65 million less under the Canada Health Transfer and $22.3 million less under the Canada Social Transfer, two transfer payments from Ottawa which are allocated according to a formula taking into account the population.

The sum of $87.3 million was subtracted from the transfer amounts paid monthly to Quebec by Ottawa between 1^er October and March 31, the date on which the current financial year ends.

The start of a major trend?

This sum is relatively small out of a total budget of around 148 billion. Quebec, however, forecasts in its latest budget a deficit of around four billion for the current financial year and red ink for the following three financial years.

But this downward revision of federal transfers distributed in proportion to the population could be the start of a major trend due to the fall in the demographic weight of Quebec within the Canadian federation – a fall which could accelerate due to of Ottawa’s immigration policies.

Conversely, Ontario, which welcomes a high proportion of newcomers to the country, obtained 91 million more under these two federal transfer programs, after a revision, due to the growth of its population, according to Ministry of Finance documents recently obtained by The Press thanks to the Access to Information Act.

“The data taking into account the situation until 1^er July were released on the Statistics Canada website on September 27. The provinces and territories were therefore able to establish fairly precise estimates of the impact of the changes on their payments,” we argue in these documents submitted to the Minister of Finance, Chrystia Freeland, last fall.

The calculations of the amounts of transfers to the provinces are reviewed periodically by Ottawa to take into account changes in the Canadian population.

Immigration targets

The Trudeau government has set ambitious targets for immigration. Canada must welcome 485,000 new arrivals in 2024 and 500,000 over the following two years. In contrast, the Legault government adopted more restrictive policies than Ottawa, arguing that Quebec must take into account its reception capacity and the importance of protecting the French language by setting immigration targets.

Thus, Quebec plans to welcome 56,500 permanent immigrants per year in 2024 and 2025. These thresholds are proportionally below the demographic weight of Quebec within the Canadian federation, which is approximately 22%.

According to Geneviève Tellier, full professor at the School of Political Studies at the University of Ottawa, downward transfers for Quebec demonstrate that the drop in demographic weight has financial consequences, in addition to having a political impact. which affects the number of seats the province holds in the House of Commons.

“There are therefore not just political effects linked to the fall in the demographic weight of Quebec within the Canadian federation. There are also economic effects. This may be the start of a trend. We accept a lot of immigrants in Canada, but few in Quebec compared to Ontario, for example. And Ontario therefore receives more money,” analyzed Mr.^me Tellier.

“This shows the ramifications of the demographic changes underway in the country. When we say that the weight of Quebec in the federation is decreasing, that has political, but also economic, consequences,” she added.

With the collaboration of William Leclerc, The Press