Quebec’s finance minister says the economy is “on track” for a balanced budget next year.
Carlos Leitao credits conservative public spending and sustained economic growth despite a global downturn.
The spending cuts undertaken by the Liberal government since it came into power mean the deficit for 2014-2015 will be $1.1 billion instead of $2.3 billion, Leitao said Thursday afternoon during the annual economic update.
Lower government spending and strong numbers in household spending and exports have grown the economy by 1.5 per cent this year.
Quebec has also created almost 60,000 new jobs, the highest private sector employment growth of any province.
But the rosy outlook is not shared by many public sector workers, who are embroiled in a labour dispute over salary and working conditions. Leitao says the sacrifice in government spending will be rewarded in time.
Leitao says the ministry of education will receive an additional $20 million this year. Starting next September, the government will inject $80 million a year directly into student services, an investment that will go towards new programs and staff, he said.
Oppositon parties say the economic growth projections are unrealistic, and the new investment in education will hardly make up for the current shortfall.
“I think it’s a bit funny because today we learned that they were cutting $120 million in our [daycare] system. So they are taking money from the little sister to give to the [big] brother,” said PQ finance critic Nicolas Marceau.
Over the next decade, more than $88 billion is earmarked for infrastructure. Leitao is also promising $2 billion in tax cuts over the next four years. Most of the reductions are in the form of tax credits for families and experienced workers and the gradual elimination of the health contribution by 2019.
Leitao says frugal spending is a must for Quebec to reduce its debt payments. The province’s debt-to-GDP ratio, which compares what Quebec owes to what it produces, indicating its ability to pay down debt, is expected to peak next year at 55 per cent. Leitao says his economic plan will reduce that ratio by 10 per cent over the next decade.
