The Parti Québécois’s Thursday budget aims to tame the deficit in two years, building a reputation of fiscal responsibility for the party as Quebec prepares for a potential election.
For more coverage of Thursday’s budget, read here. For analysis of new measures to protect Quebec-incorporated companies from hostile takeovers, read here.
Taming the deficit and cutting costs
The PQ government maintains it will eliminate the deficit – estimated at $2.5-billion as of March 31, 2014, and $1.75-billion in 2014-15 – by the 2015-16 fiscal year. The budget does not promise any new income or corporate tax increases, but introduces measures to fight tax evasion that are expected to raise revenue by $60-million a year.
Quebec’s net debt is projected at $182-billion. The government proposes to increase deposits in the province’s Generation Fund by $425-million a year as of 2016-2017 to help reduce long-term debt.
The government will launch a major review of services in all departments over the next five years to cut costs.
The growth forecast for 2014 projects a 1.9-per cent increase in real GDP.
Child care and education
Daycare fees will increase from $7 to $8 a day on Sept. 1, 2014, and to $9 a day on Sept. 1, 2015. Rates will be indexed to cost of living in subsequent years.
Tuition fees for foreign students will be increased as part of a plan to save $60-million a year.
The government intends to reduce the number of school boards and cut costs by $125-million a year.
The budget introduces patient-based funding for hospitals, linking funding to the number of patients treated in the institution. It includes financial incentives based on results obtained from treatments.
The budget also includes a 3-per-cent increase in health-care spending.
Unemployment reached 7.7 per cent in 2013. The budget plans to create 125,000 new jobs over the next three years.
The budget includes a commitment to reduce payroll cost of public servants and doctors, and a pledge to protect corporate head offices from leaving the province.
The budget offers $4-million a year to train part-time volunteer firefighters in the aftermath of the Lac-Méantic and L’Isle-Verte disasters.
The budget proposes a 5.8-per cent increase in hydro rates, as requested by the Quebec Energy Board.
It offers an additional $270-million to build 3,250 new low-income housing units, and $91-billion over 10 years for infrastructure.
QUEBEC — The Globe and Mail
Published Thursday, Feb. 20 2014, 5:19 PM EST
Last updated Thursday, Feb. 20 2014, 5:19 PM EST