Posted at 5:00 a.m.
François Legault is right to want to make the economy the question of the ballot box. After skidding on immigration, systemic racism and the third link, the leader of the Coalition avenir Québec (CAQ) is trying to reframe the debate on what most concerns voters: their wallet.
Right now, personal finances are the biggest source of household stress, even ahead of health, according to a recent Leger survey.
No wonder, because inflation continues to eat away at their purchasing power, especially at the grocery store. And the rise in interest rates, essential to calm things down, further undermines the budgets of indebted families. This slowdown could also cause a recession next year. Already, job losses have been piling up for three months.
Despite all the economic uncertainty, politicians have embarked on an escalation of promises of tax cuts. But there is no miracle: if the taxpayers have more in their pockets, the State will have to tighten its belt… and skimp on the financing of our services and our infrastructures.
At the leaders’ debate on Thursday, the leader of the Parti Québécois, Paul St-Pierre Plamondon, spoke of a “one-way ticket for austerity”, he who had resisted the electoral temptation to offer generalized tax cuts.
The same cannot be said for the CAQ. With a victory almost assured, François Legault did not however need to promise new checks and a reduction of 1 percentage point of the first two levels of taxation.
But of course, it is Éric Duhaime, faithful to the libertarian philosophy, who promises the most considerable reductions, with in particular an increase in the basic amount that a Quebecer can earn tax-free and a reduction in 2% of the first two tax brackets.
Except that to return to a balanced budget in three years, Éric Duhaime plans to put the state on dry bread and water. If the austerity years of the Couillard era made you grumble, the Conservative plan will make you roar.
We say austerity, but in reality, the Liberals have never reduced or even frozen government spending. During the most painful year, in 2015, program spending grew by 1%.
The Conservatives are planning a real year of freeze in 2024. With high inflation, that means a drop. Ayoy, doctor!
Of course, we can eliminate waste and improve productivity, but we must not fall into wishful thinking. There are limits to freezing the budgets without the services having a taste of it and the population mounting the barricades. Liberals remember…
Precisely, it seems that Dominique Anglade wants so much to disassociate herself from the Couillard years that she is now going to the other extreme. It also offers major tax reductions (1.5 points less for the first two tax brackets). And it lets the deficits grow steadily over the years.
In fact, the PLQ does not seem to care about the fact that it is the only party without an objective of returning to balanced budgets over a foreseeable horizon. Provided that Quebec only makes “small” deficits. Provided that the debt/GDP ratio does not look bad compared to its neighbours. All is well, Madam Marquise!
Sounds like Justin Trudeau.
In addition, the QLP did not hesitate to eliminate the security cushion of two billion a year to deal with economic risks. Poof! Faded away. As in the financial framework of the PQ elsewhere.
Yet there is no shortage of risk, as shutdowns in China continue to disrupt our supply chains and the war in Ukraine creates an energy crisis in Europe.
In this context, it would be better to keep our ammunition and focus on targeted measures to tackle our economic problems, such as the labor shortage that fuels inflation.
Here, we can congratulate the CAQs, PQs and Liberals who are proposing to make contributions to the Quebec Pension Plan optional for workers aged 65 and over who will be more inclined to stay in the labor market.
But we must not go to the other extreme either, like Québec solidaire, which is the champion of new spending. The causes are noble: fight against poverty, climate plan, new dental insurance program… the list is long.
But to pay for it all, Gabriel Nadeau-Dubois will add all kinds of questionable taxes. Taxing assets over $1 million will be a costly administrative nightmare, since all Quebecers’ assets will have to be assessed each year. Raising the marginal tax rate to 57% from $200,000 may not bring in the money expected, as the measure will discourage work.
Need we remind you that Quebec is already the champion of the redistribution of wealth? That the tax burden is higher there than anywhere in North America?
We don’t want tax cuts that would jeopardize our services even more. But we also don’t want a spike in spending that would derail our budget.