“Five, four, three, two, one… Zero!” The Minister of Finance launched the count of the return to a balanced budget within five years, when tabling the budget on Tuesday. And that’s good.
By holding this speech, Eric Girard sought to convince Quebecers that the tax cut of 1.7 billion per year – denounced as much by economists as by employers, which is not trivial – will not harm our finances. public.
But let’s be clear: this tax relief is on our collective credit card, because Quebec still has a deficit of 4.5 billion in 2022-2023 and it will not come out of the red for five years. It is also being done on the backs of young people, because the government will foot the bill by reducing its payments to the Generations Fund by $2.6 billion per year (for 2027-2028).
In short, we offer ourselves a gift by pushing back the bill. Enjoy now, pay later!
Over the next two years, this will even inflate the debt ratio of Quebec, which has just adopted a fresh target for reducing its debt within 15 years, which is something to be pleased about.
Since Quebec remains one of the most indebted provinces, it is reassuring to see that we have set ourselves the objective of reducing the net debt, currently at 37.4% of GDP, towards the average of the other provinces, i.e. 30% of GDP. , by 2037-2038.
But that’s if all goes well. However, there is a 50% risk that the economy will fall into recession in 2023, by the admission of the Minister of Finance.
It is counting on economic growth of 0.6% for 2023. That’s meager. But this is twice as high as the forecast of private sector experts (0.3%). And they have reduced their targets in recent days, with the brew-comrade on the financial markets. Desjardins Group now expects a decline of 0.2%.
The financial framework therefore rests on shifting sands.
And the deficit presented to us does not tell the whole story. It hides phantom deficits, because our services and our infrastructures are cracking everywhere.
Here, the situation has only worsened over the years. This year again, the maintenance deficit for our infrastructures has swelled by 14%, to stand at $34.9 billion, according to the new Quebec Infrastructure Plan (PQI) tabled on Tuesday.
This is the sum that would have to be invested if we wanted to restore all our infrastructure overnight. We are far from the mark: almost half of our infrastructures (44%) are in an unacceptable state, a discouraging jump compared to 40% last year.
In this context, the Coalition avenir Québec (CAQ) could have kept a little embarrassment before offering generalized and recurring tax cuts.
At the very least, Quebec could have limited its largesse to workers, if the objective was to stimulate employment and economic growth. After all, retirees have already had a generous gift in 2022, with the enhancement of support for seniors aged 70 and over, which costs $1.5 billion per year. They didn’t have to check out twice.
Also, Quebec could have targeted workers earning between $20,000 and $80,000, the income bracket where the gap in the tax burden is the most disadvantageous compared to Ontario, instead of offering its maximum taxes of $810 to taxpayers earning more than $98,500.
But the CAQ has not deviated from its election promise, if only to improve solidarity credit in order to help the poorest (the effect will be minimal, however) and if only to deprive the best off the tax credit for contributions to the tax-advantaged funds of the FTQ and the CSN (it’s fair game).
Finally, Quebec could have chosen to put the pedal to the bottom on ecotaxation, where the province remains a dunce. But no ! Only the duties payable on the sale of tires, which had not been adjusted since 1999, will increase from $3 to $4.50 ($6 for trucks) to catch up with inflation.
There is still a long way to go! For example, the fuel tax has not changed since 2013 and the $30 contribution required when registering a vehicle to fund public transit (outside Montreal) has not been indexed since 1992.
But, good news, workers over 65 who receive their pension from the Régie des rentes du Québec (RRQ) will no longer be forced to contribute, which discouraged them from continuing to work. This is an excellent measure to combat the labor shortage.
Because we can’t get out of it: it will take arms, and brains, to offer services worthy of the name to the population. And we have to stop shoveling the bill forward if we want to overcome our deficits. All our deficits.