This great hockey fan that is the Minister of Finance, Eric Girard, now has the opportunity to put himself in the shoes of a general manager who is entering a dark period, after having inherited a first-rate team which made his life easy for years.
His predecessor, Carlos Leitão, left him with a more than enviable financial situation, which allowed the Legault government to increase per capita spending by 36% between 2018-2019 and 2022-2023, while the average was 27%. in the other provinces, the Association of Quebec Economists recently highlighted. For Ontario, the Prime Minister’s point of comparison par excellence, the figure is 22%.
Certainly, the pandemic has been hard on public finances, but the virus has raged across the country, just as the economy has slowed from coast to coast. Even in Ontario, government employees are paid decently. It is true that there are fewer of them.
The documents attached to the budget presented Tuesday list all the billions that the government has “put back into the wallets of Quebecers” in one form or another over the years, which will total more than 4 billion for the year 2024-2025 alone. One day or another, the party ends.
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In hockey, there is a word you should not say. We can speak of a rejuvenation or a reset, but never of a “reconstruction”, which announces a long stay in the cellar of the classification which causes the amphitheatres to desert.
In politics, the taboo word is “austerity”, which scares away voters, as the Couillard government has clearly demonstrated. Of course, it did not pass the lips of Mr. Girard, who instead spoke of responsibility, prudence and even courage.
A deficit of 11 billion – a record in absolute figures, if not as a percentage of GDP – is perfectly manageable, assured the Minister of Finance. From an accounting standpoint, he is probably right. It is rather the political management which will be delicate. Reconstruction is an art that is not given to everyone.
“A misfortune never comes alone,” he recalled, referring to the forest fires and the low water supply in the Hydro-Québec basins, which added to the economic slowdown. Politics also has the unfortunate habit of combining misfortunes, as the Legault government has been experiencing painfully over the past year.
It is undoubtedly reassuring to know that, unlike the Liberals, the government does not intend to return to balanced budgets at full speed. The worst is never certain, but “optimization gestures” or “comprehensive review of government spending” have often been synonymous with cuts in the past.
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It is true that health and education will be spared, but it will take time before the improvements, if there are to be any, are perceived by the population, who already no longer believe in them.
For all government spending, the average increase over the next five years will be 2.9%. Given the budgetary weight of the two major networks, other sectors will have to suffer. Since all needs are impossible to satisfy, whether it is finding housing or daycare, the insufficiency of resources will inevitably be attributed to austerity, whether real or imaginary, and the opposition parties will make it their duty to denounce it.
Mr. Girard expects a slight recovery in the economy in the second half of 2024 and an acceleration in 2025, when the next general election will be in sight, but it will first be necessary to win it to possibly reap the fruits of reconstruction. In the end, the Coalition Avenir Québec could well be played the trick it itself played on the Liberals and make the next government happy.
Until then, Mr. Legault will have to mute his defense of equalization, which constitutes his main argument in favor of federalism. While Quebec’s own-source revenues will increase by 4.7% in 2024-2025, federal transfers will fall by 6%, or nearly 2 billion, in particular due to the changes that Ottawa made last year to equalization. Not to mention the refusal to meet the provinces’ requests for health matters.
Mr. Girard clearly indicated that returning to a balanced budget required an unconditional withdrawal with full financial compensation from future Canadian dental care and drug insurance plans. Another topic of conversation for Friday’s meeting between François Legault and Justin Trudeau.