Quebec Finance Minister Eric Girard tabled his sixth budget on Tuesday. While commentators were concerned about the delay in returning to a balanced budget, the government has so far not given in to panic. The budget provides for growth in spending that will partially offset years of underfunding of public services.
However, certain elements of the budget, such as the announcement of the review of tax and government spending demanded by the Conservative Party of Quebec, raise fears of a return to austerity in the years to come.
At first glance, the budget deficit for this year will be $11 billion. However, as Liberal ministers did before him, Minister Girard artificially darkens the picture of public finances: 20% of the current deficit is explained by the payment to the Generations Fund, which will be $2.2 billion this year. Instead of being considered an expense, payments to the Generations Fund should be seen as a financial asset. In fact, the balance sheet of public finances is not dramatic in view of the recent economic situation, marked by an economic slowdown and the rise in interest rates.
Let us also remember that in recent years, the Legault government has made the dubious choice of depriving itself of significant revenue. At least 30% of the deficit could have been avoided if the government had not decided to provide tax cuts which benefit first and foremost the wealthiest households. In 2024-2025, the government will deprive itself of $2.7 billion due to the reduction in tax rates, the standardization of the school tax and the tax holiday for large investments. In short, it is Quebec society’s own tax choices that have widened the budget deficit and deprived it of necessary public investments.
Indeed, while the government boasts of investing new sums in education and health, these will only ensure the minimum required to maintain services. For example, we have calculated that spending in the education system must increase by at least 7% to keep up with cost growth, and the 2024-2025 budget only foresees a 7.6% increase for the Ministry of Education. ‘Education. The planned investments are therefore far from sufficient to begin the vast project of improving support for students that Quebec parents have the right to expect.
As for health and social services, spending growth is 5.3%. Part of this increase will allow employees of the health and social services network to obtain a beneficial salary catch-up, but another portion will be “invested” in the digital shift, which includes the increased use of artificial intelligence in health. A study by the Institute for Socioeconomic Research and Information published in the fall, however, shows the risks of conflicts of interest and abuses associated with this sector which lacks transparency. Ultimately, very few funds in health and social services will really make it possible to strengthen prevention and improve access to services.
In terms of housing, like last year, the Legault government is showing its bias in favor of owners. Almost nothing is planned to support tenants or to encourage the development of social housing stock. The government continues to stifle the social housing sector, at a time when low-income households are struggling with significant rent increases that are pushing many onto the street. This lack of investment in non-market housing fits with the approach of the Legault government since it came to power.
Indeed, the number of social, community and affordable housing has increased much less rapidly since the Coalition Avenir Québec governed, going from an average annual increase of 2,130 between 2006 and 2018 to 1,394 between 2018 and 2022, according to data from the Quebec housing society.
However, it is with regard to the environment and climate change that the government best shows the extent to which it is not up to the challenges that Quebec will face in the decades to come.
While it increases investments in the road network provided for in the Quebec Infrastructure Plan for the period 2024-2034 by 10%, those in public transport are only increased by 0.29%. In doing so, the government is deepening the imbalance in transport investments, with the share allocated to public transport representing 28%, compared to 72% for the road network. A meager envelope of $21 million (i.e. 0.013% of budgetary expenditure) is also allocated to adaptation to climate change, which should nevertheless be a priority.
It seems that the Legault government only considers the environmental crisis as a business opportunity. All its efforts are directed towards the creation of a Quebec electric automobile industry, while Quebec urgently needs a real ecological transition plan which would focus on the development of public transport, on the decarbonization of the entire economy and on the reconversion of polluting industries.