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Quebecers unhappy with 2010 budget
Quebecers are not happy with the latest budget brought down by the provincial government.
The budget proposed Tuesday by finance minister Raymond Bachand is full of tax increases, "medical contributions," and other fees.
At that, it fails to eliminate the deficit until 2014, with Bachand pledging only to limit growth in expenditures to 2.8% by 2012.
"I think it's important that we balance the budget. That I understand," said Bob Hanna, a Pointe Claire resident who watched the budget speech.
"But I think we're going through some tough times here in Canada, and Quebec especially, and I think it's unfortunate that we've had to raise taxes and service costs as much as we've had to at this time. It would have been nice to delay that a bit."
Others say it's time for the province to rein in spending and start eliminating services, instead of adding to the growing tax burden.
The three opposition parties are denouncing the budget.
The PQ says premier Jean Charest has lost his credibility by shepherding a budget that is full of tax increases.
The ADQ also criticized the government for its failure to bring spending under control, saying eliminating expenses would be more effective than dipping into taxpayers's pockets once again.
In its 2010-11 budget tabled Tuesday, Quebec slapped its already tax-weary residents with increases in the provincial sales tax, fuel tax and tuition fees while also introducing new health-care fees.
Quebec will have the highest sales tax, which will jump to 9.5 per cent in 2012 following a previously announced jump of one percentage point set for January 2011. That doesn't include the federal GST of five per cent.
Finance Minister Raymond Bachand hopes the added revenue will allow Quebec to balance its budget by 2013-14.
"We ran deficits out of necessity," Bachand said in his budget speech. "We're going to eliminate them out of duty."
The budget introduces a number of measures to replenish the government's coffers, including:
-- Increasing fuel taxes by one cent a litre in each of the next four years, starting Thursday.
-- An annual health-care fee of $25, rising to $200 by 2012, and the possibility of a health deductible in the future.
-- An undetermined increase in Quebec's university tuition fees in 2012, which have been the lowest in the country for years.
-- And an increase in hydroelectricity rates once the province begins balancing its budget in 2013-14.
"All Quebecers must pull their weight in this approach aimed at ensuring we maintain control over our choices," Bachand said of his first budget, which gave shape to his much-hyped "cultural revolution" in the way the province pays for government services.
Staring at a $4.5-billion deficit for 2010-2011 on revenues of $64.5 billion, Bachand is asking businesses and individuals alike to fork out more for the state's largesse.
"Nothing we expect the government to provide is free," he said in his speech.
In a largely symbolic gesture, the premier, cabinet ministers and members of the legislature will all have their salaries frozen for two years.
Mounting gross debt
The budget, with its scramble to raise revenues across a range of areas, aims to head off a fiscal crisis over the province's mounting gross debt, expected to reach $160.1 billion by the end of the month.
That is equivalent to 53.2 per cent of gross domestic product, making Quebec by far the most heavily indebted province in Canada.
But if the budget seeks to restore some financial stability to Quebec, it may come at the expense of social unrest.
In an effort to establish "a stronger culture of spending control," Bachand is seeking to reduce government spending growth to 2.8 per cent this year from 3.2 per cent.
With several unionized public-sector contracts up for renegotiation, the government is warning unions to limit their expectations of what it can afford.
Charest's government is also likely to meet stiff resistance from Quebec's militant student unions, who have fought long and hard against previous attempts to increase tuition fees that have been the lowest in the country for several years.
Opposition parties described the budget as "shocking" and "unacceptable" for turning to taxpayers to relieve the pressure on government finances.
"The government is trying to eliminate the deficit on the backs of Quebecers with more taxes and fees," Parti Quebecois Leader Pauline Marois told a news conference.
"It is not acceptable for the Quebec government to go into Quebecers' pockets for money."
When asked if he was leery about attacking such sacred cows of Quebec society as health care and education, Bachand simply replied: "sacred cows only exist in India."
Government wants more from Ottawa
Quebec taxpayers, however, aren't the only ones being called upon to pony up more money to the government.
Premier Jean Charest's government indicated it would ramp up demands Ottawa compensate the province for having harmonized its sales tax in 1992, a figure it pegged at $2.6 billion.
Quebec also issued an unapologetic defence of its $8.6-billion share -- about 60 per cent -- of the $14.4 billion the federal government allots in equalization, which some have criticized for allowing the province to fund its generous social programs.
Bachand pointed out that while Quebec offers "the biggest basket of public services in North America," it pays for these services itself with taxes well above the Canadian average.
"Quebec has $15 billion to $17 billion more in services than in Ontario, and that's a choice we've made," he told a news conference before tabling the budget.
Other provinces struggling
While Quebec's financial outlook may look bleak, it is far from the only province struggling to bring its books into the black.
In this budget season alone, the governments of Ontario, Alberta, Saskatchewan, Manitoba, British Columbia announced public-sector wage freezes.
Ontario doesn't expect to balance its budget before 2017-18.
Bachand said Quebec's demographics, in which fewer and fewer people will be working over the next decade, means it can ill-afford to wait that long.
"The books must... be balanced as rapidly as possible," he said.
With files from Canadian Press