Despite running a historic deficit this year, Quebec Finance Minister Eric Girard has announced more than $2 billion in new spending, crediting a slightly stronger-than-expected economy and some newly found government savings.
The new spending measures are part of the government’s fall economic update, which Girard unveiled in Quebec City on Thursday. Wearing a smile, Girard said the government’s coffers may be in bad shape now, but things are looking up.
“Quebec’s economic recovery begins in 2024,” he said in a statement.
The spending measures target four “priority” areas. There is money for the forestry sector, housing, public safety and public transit.
Quebec can afford the spending, in part, Girard said, because the economic outlook is better than expected. When the government presented its budget in March, it forecast a 0.6 per cent growth in GDP in 2024. Now, it looks like the economy will actually grow 1.2 per cent.
The government is also re-jigging its tax system and saving $3.4 billion over five years by “optimizing” some tax credits. For example: Quebec used to provide a tax credit to people who continued to work past 60. Now, they’re only going to give that credit to people 65 and over.
That means fewer people are going to get that tax credit now and the government will save some money.
But they’re also giving some tax relief. The government is indexing personal income taxes and social assistance payments by 2.85 per cent. What does that mean? People on social assistance will see their payments increase and the Basic Personal Amount — the amount of money you can earn on which you pay no taxes — is increasing by approximately $450.
A lot has changed for the Legault government. With two years to go before the next provincial election, the premier has faced departures from his caucus and discontent from party members.
What’s in the new spending?
The new spending items, which are spread over four or five years, aren’t huge, by government standards — and some of them come paired with new federal money as well.
The government announced $184 million in new money for housing projects, but half of that money is coming from the federal government.
Some of the spending is devoted to recovering from the natural disasters that affected the province over the past year.
A $252-million boost for the forestry sector, for instance, is meant to help the industry recover from a bad forest fire season and invest in reforestation. It is also a response to an ongoing trade dispute with the United States — one that the Quebec government acknowledges could worsen when Donald Trump ascends to the presidency.
The government is also announcing some new money for “public safety.” Much of that is earmarked to assist victims of post-tropical storm Debbie and rebuild damaged infrastructure.
But that budget item also includes money to increase police coverage in the autonomous northern territory of Nunavik.
The biggest ticket item from this year’s economic update is a $1.2 billion cash injection to Quebec’s two largest cities: Montreal and Quebec City.
Much of that money, $880 million over five years, is for a public transit assistance plan. Municipal officials in Montreal have long urged the provincial government to boost spending on public transit to maintain service levels and avoid cuts.