Thing promised, thing due. The Minister of Finance is staying the course and moving forward with his tax cut for the middle class.
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The measure will be popular. It is certainly populist, being part of the very DNA of the CAQ government.
François Legault has always bet on reducing the tax burden of Quebecers, he continues his momentum. But at what cost?
Relative effect
Because the tax reduction remains modest. It will not substantially change the budget of a family facing the inflation crisis.
For a single person earning less than $40,000 a year, that’s the equivalent of a coffee and a few Timbits a week.
A couple with a family income of $80,000 can buy an extra tub of Greek yogurt per week.
Unsurprisingly, it is the wealthiest who are the big winners. The winning couple’s tax cut of $200,000 will allow them to buy a plane ticket to Europe!
It’s fun. But it is expensive, very expensive, 9.2 billion over 5 years, for a relatively marginal effect.
Worse, it is 75% of the new sums granted for growth and economic prosperity that are swallowed up in this election promise.
What view?
In the era of the global race for green technologies, faced with the monumental challenge of energy transition, the Legault government will have preferred to play Santa Claus, rather than seize the opportunity to develop an economic vision for the future.
In the United States, the Biden administration has upset the entire global balance with its pharaonic investments in green technologies, science and innovation.
The amounts are such that the competition becomes almost unfair.
As interesting as it is, the battery sector of Minister Pierre Fitzgibbon does not measure up.
Admittedly, the Girard budget invests $888 million over 5 years in the hope of attracting 100 major investment projects. It continues to deploy innovation zones.
He will certainly plead that he add $1.4 billion to his Plan for a Green Economy via the profits of the carbon exchange. But we will have to wait for the details of the Minister of the Environment to understand the economic significance.
Past vs future
Health, education, tax cuts, this budget is intended to be a classic response to the aftermath of the pandemic.
Christian Dubé has the means to pursue his Health Plan. Bernard Drainville will focus on the quality of French and help for students in difficulty.
But this budget is not an answer to the challenges of the future.
The economy of the next few decades will be fueled by artificial intelligence, quantum computing. Biotechnology, clean technology, critical minerals will drive the paying jobs that François Legault dreams of.
However, it does not offer a precise and ambitious roadmap to get there.
Moral of the story, this budget is part of the continuity of the government of the CAQ, responsible, balanced, generous.
But he is not daring.
Minister Eric Girard must know this. It is content with economic growth below 2% for the next 5 years.
We are far from the electric shock that would allow Quebec to become a leader in tomorrow’s economy.