(Quebec) In its March 22 budget, the last before the general election, the Legault government intends to give a financial boost to a large number of Quebecers in order to cope with the rising cost of living.
Posted at 1:30 p.m.
Updated at 2:50 p.m.
Public finances show a surplus of two billion dollars after seven months of the fiscal year, but Quebec still expects it to find itself in the red at the end of the year.
During his fall economic update, the Legault government’s top fundraiser announced the distribution of checks of $200 to $275 for 3.3 million people to counter the impact of the increase in the rate of inflation. He wants to do more, reach more people, in his next fiscal year, that of the year 2022-2023, expected on March 22.
“Inflation affects everyone. [L’automne dernier]we made an adjustment that targeted 3.3 million people who received less than $54,000, the clientele [bénéficiant] solidarity tax credit. We are analyzing all of this. It is certain that we are looking to see if we can have a more general application measure, ”he said Tuesday in the National Assembly, during a press scrum to announce the date of the tabling of his budget. .
Prime Minister François Legault added a little later: “I am very aware that the increase in the price of rents, groceries, gasoline is currently hurting a lot. Inflation is very high, in cases higher than increases in citizens’ incomes. […] We’re going to do something, I want to tell you to be patient until March 22, but we’re going to help your wallet. »
At the Blue Room, the Liberal leader, Dominique Anglade, argued that her party had suggested various measures in recent months to counter the rising cost of living, “proposals that have remained unheeded by the Prime Minister “. She is campaigning for a freeze on hydroelectricity rates, while Hydro-Québec announced a 2.6% increase as of January 1.er April.
François Legault sweeps away this option out of hand. “The bigger the house you have, the richer you are, the more you would benefit from a freeze. We, what we prefer, is to send an amount to the wallets of Quebecers which will cover, among other things, this exceptional increase in Hydro-Québec rates, ”he explained.
Eric Girard dismissed the idea of freezing rents, a proposal made by Quebec solidaire. “Generally, when the tariffs are frozen, there is a tariff jump afterwards and history has shown that this was not a good practice”, argued the Minister of Finance.
Inflation exceeds government forecasts. He had forecast a rate of 3% for 2022, when we are heading towards 4%.
“We have to revise inflation upwards and, in general, that helps revenues slightly [du gouvernement] by nominal GDP growth, which is higher,” explained Minister Girard, specifying, however, that the rise in interest rates resulting from announcements by the Bank of Canada is pushing up debt service.
For the current year, therefore 2021-2022, public finances are in the green after seven months, according to the most recent monthly report from the Ministry of Finance.
From April to October – therefore before the fifth wave of COVID-19 – Quebec recorded a surplus of 2 billion. This is quite a contrast with the previous year, when the government was in deficit of 5.3 billion for the same period.
“The sustained growth of economic activity in Québec since the beginning of the fiscal year has had a positive impact on government revenue. For the whole of the 2021-2022 financial year, the annual deficit forecast is however maintained at 6.8 billion, ”indicates the Ministry of Finance.
He explains that spending will increase more during the last months of the year and that economic growth “will evolve at a slower pace than at the beginning of the year”.
From April to October, the government’s corporate tax revenues jumped nearly 56% compared to the same period last year. Those from government companies, in particular Loto-Québec and Hydro-Québec, even exploded by 90% – certain state companies had particularly suffered from the pandemic in 2020-2021. We also note a strong increase in revenue related to personal income tax (18.6%) and consumption taxes (16%). Federal health transfers are up 19.3%, in particular due to Ottawa’s aid measures to deal with the pandemic.
Departmental expenditures increased by 4.1% as at October 31 compared to the same period the previous year, which is below forecasts for the moment. This is why we can anticipate a greater increase in disbursements in the last few months.
Debt service swells by 23%, which “is mainly explained by the rise in interest rates”, indicates the Ministry of Finance.
Eric Girard reported last fall that public finances were in better shape than expected. He had also changed his forecasts: the anticipated deficit for the current year had fallen from 12.3 to 6.8 billion, while the structural deficit, the one that will remain after the health crisis, had shrunk from 6.5 to 4 billion per year. The favorable trend seems to be continuing, if we rely on the most recent data from the Ministère des Finances. According to Eric Girard, the Omicron variant, therefore the fifth wave, led to a 0.3% drop in economic growth in Quebec, which should be reflected in future reports from his ministry.