Quebec Finance Minister Eric Girard said young people are also set benefit from the tax cuts promised by the Legault government. He was defending the decision to finance a promised tax cut by reducing payments to the Generations Fund.
"Young people are working today," the minister insisted in a press scrum after a speech to the Montreal Metropolitan Chamber of Commerce on Monday.
"The young people of today, my children who are entering the labour market, they want to save, they want to buy a house, they have aspirations. They too pay high taxes. Lowering taxes is not just for people aged 50 and over. It's for all workers in Quebec."
During the election campaign, the Coalition Avenir Québec (CAQ) promised to lower personal income taxes by one percentage point for the first two tax brackets ($15,000 to $92,000 in income) starting in 2023. This reduction will be financed by reducing the payments to the Generations Fund.
The economic update presented by the minister last week does not mention this promise, but the government still intends to confirm it in its budget to be presented next spring. It would cost $7.4 billion over four years.
Force Jeunesse president Simon Telles said he doesn't believe that young people will benefit from a reduction in their tax contribution.
"When major cost increases are expected in key sectors such as health and education over the next few years, it's hard to understand the intention to lower taxes, let alone the choice to pass on this bill to future generations who will already be struggling to maintain access to quality public services and healthy public finances," he said.
Girard defended his government's choice before an audience of Montreal business people. He said middle-class taxes were higher in Quebec than in Ontario, without mentioning the services obtained in exchange, such as affordable childcare, public drug insurance or parental insurance.
"It's not someone earning $300,000 who pays more tax than in Ontario, proportionately. It's at $70,000 of income that you pay 36 per cent more tax in Quebec than in Ontario," he said.
Girard says the size of payments would have grown significantly under the status quo. By funding the tax cut in this way, the government would also protect the funding of services, he said.
"When the Generations Fund was created in 2006, contributions were in the hundreds of millions," he said. "This year, we are contributing more than $3 billion. If we don't do anything, we'll be at $5 billion by 2026-2027. We propose to keep it at $3 billion."
"The government's fiscal framework still provides for an increase in the state's missions of 4.7 per cent. The state's missions are adequately financed over the horizon of the fiscal framework," said Girard.
LIMIT ON INFRASTRUCTURE SPENDING
Questioned by Chamber of Commerce president and CEO Michel Leblanc on investments in infrastructure, Girard said that Quebec had reached a limit as to the amount of money the government could spend on infrastructure.
"The Quebec Infrastructure Plan (PQI) is calling for $142 billion in spending over 10 years. The PQI is one and a half times the size of Ontario's," said Girard. "We are already pushing the envelope to the maximum. Moreover, we have to ask ourselves if, in some cases, when we push the demand like that if the effect is not only on the prices and not on the realization."
The money is available for infrastructure, the minister said.
"We are very close to our physical capacity limits. It has nothing to do with money," said Girard.
At a time when the government needs to renovate schools and hospitals, Girard seemed unsympathetic to the Montreal Chamber of Commerce request to expand the Palais des congrès de Montréal.
"I find that the COP15 works very well with the existing size," he said.
This report by The Canadian Press was first published in French on Dec. 12, 2022.
