On this day after World Social Justice Day, we believe that the Minister of Finance, Eric Girard, must take a moment to listen to the economists he meets less often, those who believe that the austerity towards which we are heading is dangerous, but avoidable. While the minister prepares his budget and seeks financial room for maneuver, he must include a real modernization of two fundamental laws for state budgetary planning: the Balanced Budget Act and the Act on reducing the debt and establishing the Generations Fund (FDG).
These two laws, the first put in place by Lucien Bouchard and the second by Jean Charest, have been repeatedly denounced because of their restrictive nature. This political obsession with “cleaning up” public finances prevents the government from making appropriate budgetary choices, particularly in terms of investment in state missions. These laws place debt control on a pedestal and neglect the importance of the crises facing Quebec.
Debt, always debt
In 2006, Jean Charest created the FDG in order to reduce the weight of gross debt to 45% of GDP by 2026-2027. Although the objective has already been achieved, despite the pandemic crisis, the CAQ decided to do it again last year. From now on, instead of gross debt, net debt, which takes into account government assets, must not exceed 32.5% of GDP by 2037-2038. What was supposed to be a temporary relief measure therefore takes on the appearance of a permanent policy, all without a real public debate on the issue having been held.
In doing so, the Minister of Finance is forcing the continuation of the austerity framework of recent decades, which he should nevertheless abandon. The budgetary “over-discipline” to which it forces the population is maintained to the detriment of the fundamental missions of the State. However, Quebec enjoys a most favorable situation in terms of its budgetary viability, both according to independent studies by the Parliamentary Budget Officer and according to the Chair in Taxation and Public Finance.
Balanced budget
The “Zero Deficit Act” forces Quebec to be the only jurisdiction in Canada not to use the accounting definition of a deficit. For the budget to be balanced within the meaning of the Act, it must actually generate an accounting surplus at least equivalent to the payment from the Generations Fund. Without this accounting aberration, the budget balance would be achieved much sooner than the minister predicts, which would allow significant reinvestments in public services.
The government is voluntarily tying its hands instead of giving itself the room to maneuver it needs. The Coalition Avenir Québec (CAQ) has all the power necessary to allow Quebecers universal access to quality public services. It must stop hiding behind its budgetary laws and make the necessary choices for social justice.
*Co-signed this text: Yves-Marie Abraham, professor, HEC Montréal; François Bélanger, economist, Confederation of National Trade Unions; Érik Bouchard-Boulianne, economist and director of the professional and social action department, Centrale des syndicats du Québec; Jean Dalcé, economist, Confederation of National Trade Unions; Marc Dean, research advisor, Union of Professionals of the Government of Quebec; François Desrochers, research manager, Alliance of professional and technical personnel in health and social services; Francis Fortier, research advisor, Centrale des syndicatsdemocratiques; Marc-André Gagnon, professor, Carleton University; Louis Gill, retired professor, University of Quebec in Montreal; Pierre-Antoine Harvey, economist, Centrale des syndicats du Québec; Philippe Hurteau, research manager, Alliance of professional and technical personnel in health and social services; Mario Jodoin, economist; Robert Laplante, Director General, Institute for Research in Contemporary Economy; Marc Lavoie, professor emeritus, University of Ottawa; Samuel-Élie Lesage, research advisor, Centrale des syndicatsdemocratiques; Marguerite Mendell, Distinguished Professor Emeritus, Concordia University; Sylvie Morel, professor, Laval University; Keith Newman, economist; Minh Nguyen, socio-economist, Centrale des syndicats du Québec; Mathieu Perron-Dufour, professor, University of Quebec in Outaouais; Marc-André Pigeon, professor, University of Saskatchewan; Mathilde Rajotte, sociopolitical advisor, Quebec Interprofessional Health Federation; Louis-Philippe Rochon, professor, Laurentian University; Ruth Rose, retired professor, University of Quebec in Montreal; Mario Seccareccia, professor emeritus, University of Ottawa; Pierre-Guy Sylvestre, economist, Canadian Union of Public Employees; Simon Tremblay-Pepin, professor, Saint-Paul University.