The financier of the Legault government, Minister of Finance Eric Girard, has lost all of the room for maneuver he had given himself in the 2023-2024 Budget, tabled last March.
Indeed, according to the Report on the financial situation as of 2e quarter that the minister has just tabled, the “Provisions for contingencies” of 1.5 billion which appeared in the March 2023 Budget have been entirely used.
According to Minister Girard’s “New Budget Estimate”, the CAQ government is heading towards a deficit (before transfer of money to the Generations Fund) of some $2 billion, even after having completely used the “Provisions for contingencies” of $1.5 billion.
This doesn’t bode well…
That being said, the risks of seeing the Legault government end this fiscal year with an even bigger deficit are high.
Here’s why. In its budget forecasts from last November’s Economic Update, increases for the renewal of collective agreements are based on an overall offer of 14.8% over five years.
However, the government offer currently on the table has already been revised to 16.7%, or 1.9 percentage points more. This offer was rejected and demolished by union representatives of the state’s 600,000 employees.
- Listen to Michel Girard’s economic discussion on the microphone of
, every day on the airwaves of
:
To put an end to the gigantic conflict with public and parapublic service employees, it is obvious that François Legault, together with the minister responsible for negotiations Sonia LeBel and the financier Eric Girard, will have to grant a higher salary increase.
We are probably talking here about several hundred million dollars for each of the next five years of the collective agreement, starting with the fiscal year which began on 1er last April. The old collective agreement ended on March 31. We are therefore in Year 1 of the new convention that the two parties are diligently negotiating.
Falling government businesses
When tabling the budget last March, Minister Girard expected to collect revenues of $6.8 billion from government companies, including Hydro-Québec, the SAQ, Loto-Québec and Investissement Québec. Over the months, he was forced to sharply revise “his” revenues from state companies.
He now plans to end the current budget year with $1.2 billion less than initially planned, with revenues falling from $6.8 billion to $5.6 billion. These are Hydro’s revenue forecasts which have literally deflated, even by at least 850 million.
Another hard blow on the revenue side: revenues from personal income taxes will fall by $449 million compared to initial forecasts and those from corporate taxes are reduced by $929 million.
- Listen to Michel Girard’s economic discussion on the microphone of
, every day on the airwaves of
:
Federal transfers on the rise
Fortunately, the drop in revenues from state corporations and taxes was largely offset by an increase of $1.76 billion in revenues paid by the federal government, which this year will reach a total of $31.5 billion. $ billion.
Increase in spending
Although the CAQ government plans to spend 567 million less in the Education (-$273 million), Higher Education (-$146 million) and Transport (-$146 million) portfolios, it plans to end the current fiscal year with additional spending of $2 billion compared to its initial forecasts last March.
Want more content from
? Don’t miss it every day live, in
or in
on the audio platform
.