(Quebec) The structural deficit of Quebec will be less than 3 billion thanks to the good performance of its economy in 2021, announced the Minister of Finance, Eric Girard, on the eve of the tabling of his budget.
Posted at 2:39 p.m.
Updated at 4:38 p.m.
“Twelve months ago, in the 2021-2022 budget, we estimated the structural deficit at more than $6 billion. It has melted in half, ”welcomed Mr. Girard on Monday as he presented his new shoes to the media, an old political tradition. Its budget will be tabled on Tuesday.
Wearing New Balance running shoes, “light and efficient”, Mr. Girard explained that the structural deficit – caused by recurring expenses which will continue after the pandemic – will be less than 3 billion. He had already readjusted the target by planning a structural deficit of 4 billion last November during his mini-budget.
PHOTO JACQUES BOISSINOT, THE CANADIAN PRESS
Eric Girard, Minister of Finance of Quebec
He explains the situation by an “exceptional” performance of the Quebec economy, which inspired the purchase of these shoes “that you want to wear when you want to run fast”, he said. Quebec, he pointed out, has also outpaced Canada, the United States and Ontario, the eternal competitor and favorite target of Premier François Legault. This growth has also enabled the province to post a surplus of $2 billion after seven months of the fiscal year.
Despite this good news, Mr. Girard does not intend to bring forward the planned date for achieving the zero deficit.
The objective is for the return to equilibrium to take place with as little effort as possible, that is to say for the transition to be as smooth as possible. We keep the 2027-2028 objective.
Eric Girard, Minister of Finance of Quebec
“You have to be aware that we are in a context of uncertainty. We have a prudent financial framework when we say 2027-2028, it is possible that we will break even one or two years earlier. But there is still a high degree of uncertainty: pandemic, invasion of Ukraine by Russia,” he told reporters.
He estimates that the probability of a recession hitting Quebec in the next year is one in four. “With the uncertainty, the likelihood of a more difficult scenario has increased,” the minister said. If it’s not a recession, it could be a steeper “economic downturn” than expected.
INFOGRAPHIC MINISTRY OF FINANCES OF QUÉBEC, BUDGET 2021-2022
Last March, the Ministry of Finance predicted a structural deficit of 6.5 billion this year. It will ultimately be less than 3 billion. Quebec is therefore two years ahead of its schedule for returning to a balanced budget. However, Minister Girard does not intend to deliver a budget in black ink sooner. Source: Quebec Ministry of Finance, 2021-2022 budget
Checks to counter inflation
Mr. Girard took advantage of the press briefing to reiterate his intention to pay emergency aid to Quebecers to help them overcome the rising cost of living. He recalls that the exceptional benefit “which compensated for inflation” in 2021 had been given to 3.3 million Quebecers whose income is lower and who are entitled to the solidarity tax credit. This time, more citizens will receive a check: “we are looking for a more general application measure”, he said, without specifying who exactly will be able to benefit from it.
Will the richest be entitled to it? He did not wish to answer the question. But if the question of the check sent to Quebecers gets attention in this budget, we must above all not see in it an electoral temptation, said the Minister. It is “at the service” of Quebecers, and will deliver a “responsible” plan with measures “for the main missions of the State: health, education, the economy and the environment”. The rise in the price of carbon also allows Quebec to garner more revenue in its Electrification and Climate Change Fund, which will give it the possibility of financing more environmental measures.