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A blue cheque

Photo Credit: PC Photo/Jacques Boissinot

Photo Credit: PC Photo/Jacques Boissinot

The budget at a glance

  • Revenue: $138.5 billion (+2.2%)
  • Expenses: $136.6 billion (+4.8%)
  • Budget deficit before payment to Generations Fund: $3.0 billion
  • Payment to Generations Fund: $3.45 billion
  • Deficit: $6.45 billion in 2022-2023
  • Gross debt: $215.2 billion or 43.1% of GDP as at March 31, 2022
  • Net debt: $199.0 billion or 39.8% of GDP as at March 31, 2022
  • Economic growth: 6.3% in 2021, 2.7% in 2022
  • Growth in program spending: 4.9% in 2022-2023
  • Infrastructure investments: $7.5 billion more to the 2022-2032 QPI, reaching $142.5 billion.

Though just a few days ago, François Legault said that the budget would not be electoral in character, today’s exercise has plenty of goodies to please an electorate six months ahead of the next election. The tone is set from the very first pages: 6.4 million Quebeckers will receive a $500 cheque to offset the effect of inflation. The government also announced measures to mitigate the housing crisis, a major concern. Aid to individuals, the overhaul of the health system, and education take up the lion’s share of Finance Minister Éric Girard’s fourth Opus.

The government is relying on the galloping indexation and the uncertainty due to the war in Ukraine to distribute $3.2 billion directly to Quebeckers a few months prior to the election. The hike in gas prices, the housing shortage and inflation projected to be nearly 5% are driving the government to help families make ends meet.

With the population seriously concerned about inflation, the Legault government is acting where it hurts. Many economists think this inflation could send the global economy into a full recession. The amount returned to Quebeckers could have fully covered the deficit not including the payment to the Generations Fund. The Coalition Avenir Québec is betting that the people will prefer a cheque to an early return to a balanced budget.

Since being elected, the Legault government has gotten us used to budgets with heavy growth in expenses. This one is no exception, with a 4.9% increase. The good news is that they reduced the structural deficit by more than half (2.8 billion vs. 6 billion) as compared to last November’s update.

After raising expectations on the health system’s overhaul, the budget provides $1 billion for this important sector. Health and Social Services Minister Christian Dubé will give the details later, but we already know that the overhaul will stand on four guiding principles: human resources, access to data, information technology, and infrastructures. A reorganization of health work is also on the agenda. The talk is about “changing the culture”, for which the government is allotting an extra $3.4 billion.

To help businesses, the government is deploying the Research and Innovation Strategy with $1.3 billion over four years. It will unveil a green hydrogen and biofuels strategy imminently, while regional air transport will receive large amounts (+$255 million). The budget also aims to reboot the tourism (+$250 million) and culture (+$255 million) sectors.

We feel that the CAQ is looking to silence the criticisms targeting its main vulnerabilities: First Nations, the environment, the housing crisis and conjugal violence. Minister Girard’s latest budget gives special attention to each of these areas. The government is announcing major outlays to battle sexual violence and promote equality between men and women. The budget is also offering support for the social and cultural development of Indigenous people. The big surprise is a major increase to support community organizations: $900 million over five years.

As for the Quebec Infrastructure Plan, an extra $7.5 billion will be injected over ten years, raising the total investment to $142.5 billion. The QIP totaled $100.4 billion in March 2018. It will finance new projects including: extension of the Montreal Métro, extension of Highway 20 to Rimouski, reconstruction of dilapidated residential and long-term care centres (CHSLDs), expansion and construction of new schools, the State’s digital transformation, and the transformation of government workplaces.

So, is an electoral budget or not? One thing is certain, It came at a time when the CAQ saw its support wane early this year and recent surveys showed a Quebec Conservative Party continuing to rise. With the CAQ currently alone in the lead, it does not have to make electoral payouts, but offering $500 to nearly 95% of Quebec adults is liable to consolidate its popularity.

We can expect that the opposition parties won’t mince words in denouncing this opportunistic-looking initiative, but the CAQ has taken the step to alleviate the concerns of families with a direct, interventionist response.

True to tradition, the Finance Minister pranced before the media with shoes for the occasion: running shoes – a judicious choice, knowing that the electoral marathon has just begun, and what better than a “blue cheque” when the starter’s pistol goes off.

Principal measures

Standing up to cost-of-living increases: $3.8 billion

  • A $500 cheque to 6.4 million Quebeckers with less than $100,000 in salary ($3.2 billion over two years)
  • Increased supply of affordable housing and improved housing quality ($633.6 million over five years)

Health: $5.2 billion in added investments

  • Upcoming announcement on overhaul of health system ($1 billion over five years)
  • Improvements in the management and provision of work ($3.4 billion over five years)
  • Accelerated move to the “cloud”, administrative operations, and development of relevant applications for institutions ($788.9 million over five years)
  • Fight against new COVID-19 outbreaks ($1.7 billion)

Economic stimulus measures: $4.2 billion

  • Deployment of Quebec Research and Innovation Strategy ($1.3 billion over five years)
  • New cyber security enhancement program ($100 million over two years)
  • Digital transformation of companies and the State ($110 million over two years)
  • Support for regional air transport ($255 million over five years)
  • One-year extension of enhanced tax credit for investment and innovation ($155 million)
  • Greater integration of immigrants into the labor force ($290 million over five years)

Education and higher education: $2.8 billion in investments

  • School retention and achievement ($1.6 billion over five years)
  • Improved access to higher education and increase graduation ($1.25 billion over five years)

Community action and support to communities: $2.2 billion

  • Enhanced support to missions of community organizations ($888 million over five years)
  • Fight against sexual violence and for gender equality ($163 million in added investments over five years)
  • Support for the social and cultural development of Indigenous people (additional $100 million over five years)

Environment: accelerated transformation

  • Plan for green economy 2030: $1 billion more (2022-2027) due to increased revenue from the Carbon Exchange
  • Upcoming deployment of the Green Hydrogen and Bioenergy Strategy ($100 million over four years)
  • Extension of electric vehicle purchase rebate to 2026-2027
  • Encourage green packaging designs ($18 million over three years)

Next steps

  • Budget debate (25 hours)
  • Study of budget appropriations in parliamentary committees (100 hours)
  • Adoption (in May)

——— Guillaume Fillion is a former Director, Public Affairs at NATIONAL Public Relations