There will be no increase in the provincial sales tax in Thursday's budget, Quebec's finance minister says, because Quebec will balance the books through lower spending.
Carlos Leitao confirmed that a recommendation to hike the Quebec sales tax won’t on the table at the National Assembly Thursday.
“Over the past 40 years we've had 34 deficits, so we think it's time to put an end to that series. We'll have a balanced budget and a budget that contains a very wide number of measures,” he said.
An independent panel of economists recently recommended a major decrease in income and businesses taxes, recommending higher consumption taxes, including a hike in the Quebec Sales Tax.
The government appeared receptive to the Godbout Report but whether any of the 71 recommendations will become law remains unknown.
No provincial government has tabled a balanced budget in six years and Leitao said that public spending will be cut in order to reacht that goal.
“We're reducing the rate at which we increase spending so that we can go back to a [balanced budget,]” said Treasury Board President Martin Coiteux.
He told reporters Wednesday that any such cuts won’t necessarily lead to diminished services, citing the healthcare reform legislation that slashed bureaucracy.
“Through Bill 10, what we're doing is we're cutting not in services, actually we're doing the opposite we're cutting administration,” said Coiteux.
Francois Legault, who heads the CAQ party, said that Quebec’s economy needs a boost, particularly as the loonie is low.
“Right now there's a window of opportunity in the manufacturing industry. The Canadian dollar is at 80 cents American right now, so we should push exports,” said Legault.
One economic think-tank is hoping that the budget increases competition in public services such as daycares by offering cash directly to parents, rather than having the government be involved in operating such facilities.
“Quebec has expensive public services but the quality of services aren’t better than other places,” Vincent Geloso of the Montreal Economic Institute said in an interview with CTV Montreal Wednesday.
“I’d like to lower corporate subsidies and also lower taxes on businesses. You’d cut one of the biggest expenses, corporate subsidies and then you say, ‘we have stopped helping you but we’re no longer hindering you.’”