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Quebec’s budget update too optimistic?

by Axelle Viramontes de la Torre November 24, 2020
Quebec’s budget update too optimistic?

Quebec’s Finance Minister plans to return to balanced budget in five years

Quebec’s new budget update presented on Nov.12 by Finance Minister Eric Girard did not convince the members of the Official Opposition, qualifying it as “extremely optimistic.”

Girard has made ambitious projections in his budget plan despite Quebec’s deficit of $15 billion in 2020-2021. He is expecting the province to “return to a balanced budget within five years without cutting services and without increasing income and other taxes.”

To reach that goal, $1.5 billion will be invested over three years to help Quebec’s economic recovery. Of that amount, $477 million will be awarded to stimulate economic growth in various sectors.

“We need to stimulate economic growth. Our companies must be more competitive, more productive,” said Girard while presenting his budget plan.

Moments after the finance minister finished presenting his plan, the opposition held a press briefing in which Dominique Anglade, leader of the Official Opposition, said her party had asked the CAQ to deliver three different scenarios from the budget update.

Yet, just one “optimistic” scenario was presented to the public, making it hard for the opposition to have faith in the budget’s achievement potential.

Girard’s goal to get back to a balanced budget within five years doesn’t seem realistic to the opposition.

During the opposition’s presser, Pontiac MNA André Fortin expressed his misgivings about Quebec’s new budget plan. He believes the projections proposed in the budget are based on a theoretical increase in the Canada Health Transfer of $6.2 billion annually from the federal government, and other non-factual information.

“He’s also banking on the fact that there is going to be a vaccine and that the economy is going to kickstart back again really quickly. We don’t know that. There’s too much uncertainty,” said Fortin during the question and answer period.

When asked if his ambition for Quebec was too big, Finance Minister Éric Girard simply responded that, although the next six months may be hard, Quebecers need to stay positive and should look ahead at the future as there will be an economic restart.

Moreover, the Official Opposition also considers it too early to think about an economic recovery when the province is still undergoing a recession.

“We can’t commit to a five-year balance when we don’t know when the recession will be over,” said Liberal MNA Carlos J. Leitão during the opposition’s press briefing. “A balanced budget can only come when the economy returns to a more normal situation,” he added.

Many small businesses are on the verge of bankruptcy and need more investment to keep their business running. According to Anglade, the budget didn’t include any additional measures to help them. She also expressed her worries of an economic recovery being almost impossible if too many of them close.

“The reason why it’s extremely optimistic is because they say, ‘the growth is going to pick up.’ But in order for the growth to pick up, you need the companies to pick up. If they’re closing … you won’t see the economy going up,” she said.

Last March, Girard presented his first version of his 2020-2021 budget, which was overshadowed by the first wave of COVID-19. This update shows a three-year financial framework, instead of the usual five-year projection, due to the high level of uncertainty of the pandemic.

 

Graphic by @sundaeghost

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