With its 2016-2017 budget, the Liberal government appears to be trying to shift the message from austerity to prosperity as it starts to lay the groundwork for the next election in 2018.
Aside from British Columbia, Quebec is the only Canadian province to balance the books this year. This is Finance Minister Carlos Leitao’s second balanced budget and the third budget he’s tabled.
Premier Philippe Couillard has used the analogy of a ship sailing through rough seas and says Quebecers are now entering calmer waters. And while some would say the Liberals’ measures qualify as austerity, the government refuses to use that label. Leitao said using the term is “insulting” to people who have lived through “real austerity.” The minister insists on calling it tight spending control.
“We've gotten our fiscal house in order and we've laid a solid foundation on which to build our prosperity,” he said, adding now the province has more leeway for its priorities.
The big one this year is education, which will see $1.2 billion over three years. The education department receives the highest budget increase, at three per cent, up from the 0.9 per cent increase during the last fiscal year. $700 million is new money to fix crumbling schools and improve sports facilities while $500 million will be used to reduce the dropout rate and improve academic success.
Funding for healthcare has gone up, but just barely, to 2.4 per cent. Critics say the system needs a boost of at least 4 per cent, and say anything less amounts to more cuts.
The government is also speeding up the abolishment of the controversial health care tax. First introduced by the Charest Liberals in 2010, it will be phased out by the end of 2017.
There is also some encouraging news for small and medium-sized businesses.
“A couple of good measures for small businesses owners that we've been asking for, for a long time, like the substantial reduction in payroll taxes for smaller businesses,” said Martine Hebert of the Canadian Federation of Independent Businesses.
Montreal Mayor Denis Coderre said thinks he thinks Quebec addressed the city’s budgetary concerns, because it maintains a commitment for infrastructures and economic development initiatives
“It is a good budget. Not only there is no raise of the income or taxes, we're talking also in major investment infrastructures,” he said.
But the opposition says the Liberals aren't doing enough to create jobs.
“The 250,000 jobs promise has completely vanished. It's not even in the budget that was tabled. It's not even there. So in terms of job creation it's very bad. It's going down below 30,000 per year,” said PQ finance critic Nicolas Marceau.
The government is projecting a $2-billion surplus in 2016-17, with the money going toward reducing the province's massive debt. CAQ Leader Francois Legault says there was a better way to use that money.
“I understand that we have to reduce debt, but I think we made an error - to put the full $2 billion of surplus on the reduction of the debt. We really should have put a part of this money on the reduction of income taxes,” he said.
Leitao said he understands Quebecers would like to see tax breaks, but that reducing the province's debt load is the priority.
“The starting point in Quebec is a very high level of public debt. Alberta, for example, is now facing a serious shortfall, but they have no debt. Therefore, there are a number of things they can do, like sustaining a large deficit for a while. We can’t do that, because our starting point is one of high debt,” he explained in an interview with CTV.
How this budget affects you and your family
-- Additional funding of more than $1.2 billion over three years in education and higher education. $700 million is new money to fix crumbling schools and improve sports facilities while $500 million will be used to reduce the drop-out rate and improve academic success.
-- Accelerated elimination, by the end of 2017, of a health contribution for individuals; government estimates Quebecers will save $759 million a year when fully implemented,
-- Fifty per cent reduction in additional contribution for second child in subsidized daycare; for a couple earning $100,000, daily fee for second child falls to $9.36 from $11.41, retroactive to 2015,
-- For health care: $88 million has been earmarked for home care and to support people with an autism spectrum disorder,
-- Quebec is investing $12 million to help aboriginal communities. Native friendship centres and other organizations that work with Aboriginal people living in urban communities will be receiving $5 million over the next five years in addition to $3.9 million in order to improve their infrastructure and help improve the services they offer.
-- The government is planning to implement a strategy to prevent and counter sexual violence. The strategy will target sexual abuse and sexual exploitation. The Economy, Science and Innovation Ministry will receive $1.9 million in this fiscal year to push the strategy forward.
-- with files from The Canadian Press