Posted yesterday at 11:00 a.m.
Many expected an electoral budget. That’s not what happened. Well almost.
Apart from the gift that Eric Girard gives us with our own money, the priorities of the Minister of Finance make sense. Health. The elders. Education. The environment. The problem is that implementing the budget might be more complicated in practice than on paper.
First, the candy. We will find as few taxpayers disappointed to receive $500 as there are economists who will applaud the idea. By sending this sum to all those who earn less than $100,000 a year, the government is watering it down: 6.4 million Quebecers – or 94% of adults in the province – will receive the windfall, at a total cost of 3.2 billions of dollars.
Raining down billions to spend isn’t usually the best way to fight inflation.
If we wanted to help those who were most affected by the price increases, we could increase the solidarity tax credit, paid to 3.3 million Quebecers. And that wouldn’t include childless couples whose spouses each earn $80,000 a year…
The economist had the upper hand
Generally speaking, the economist’s point of view has weighed more heavily than that of the politician.
Many hoped for measures to facilitate access to housing, but apart from the financing of 1000 new affordable housing units, there is almost nothing. Adding money in an overheated market would have made the price problem worse without improving access, especially for the less well off. There are solutions to increase the real estate supply, such as building more and encouraging owners to stay in rental properties, but they are of a legislative and regulatory nature. We can’t wait to find out which ones the government will choose.
In the environment, too, the economist has spoken. Subsidies for electric cars are reduced a little, even if they remain high ($7,000, rather than $8,000, and $5,000 for plug-in hybrids). Manufacturers are struggling to meet the demand for electric cars, their prices are falling, and the cost of gasoline is rising. The funding for charging stations announced for Montreal and Quebec will make a bigger difference to the adoption of electric cars. It will have to be extended elsewhere.
Taxing carbon at a sufficient level remains the best way to discourage pollution, as some 30 Nobel laureates in economics, left and right, have already argued.1. The counterpart is to give these sums back to the population, which fiscally rewards good behavior.
Currently, the government is doing the opposite: it is fattening a Green Fund that is yielding few results, with a price on carbon that has little impact on pollution. The price of carbon in Quebec is lower than the federal tax, and well below that of Europe. Unsurprisingly, we are light years away from reaching our reduction targets for 2030. We would have liked to see more audacity as the Arctic and Antarctica smash temperature records…
Quebec will run out of arms
Unsurprisingly, health still eats up the largest share of public spending, and that share is growing faster than any other.
If the “overhaul” of the health system is not accompanied by considerable efficiency gains, we risk finding that the pandemic was not too bad compared to what the aging of the population will do to us.
First, because the billions are not infinite, even if health does not lack appetite. But above all, because we’re going to run out of hands.
The government wants more home care. He wants nurses and attendants for his seniors’ homes. He wants to open 15 clinics for the thousands of Quebecers who are suffering from long-term COVID. He wants to add emergency coordinators. He wants to add 5,000 (five thousand!) administrative staff to get the nurses off the paper and back on the floor. This is without counting the staff that are already lacking in hospitals.
It means recruiting several thousand workers, just to keep the system afloat, before the effect of the aging population. And that’s only healthy. Because we also hope to recruit teachers and educators, among others.
This leads to the crucial issue that the budget did not address: Quebecers aged 60 and over work less than other Canadians of the same age.
Minister Girard highlighted our low unemployment rate. This is good news, but it also means that unless we clone ourselves, we will have to take Quebecers out of retirement, delay that of thousands of others, and seek abroad the labor that we lack to be able to take care of ourselves.
You can’t find any of that in the budget. This is perhaps, precisely, a discussion that we did not want to have before the elections.