Quebec’s Spring Budget includes a $ 500 lump sum for all adults with incomes of $ 100,000 or less to offset the effects of inflation, with cash arriving months before the state elections. intend to do something.
Treasury Minister Eric Girard told reporters on Tuesday after tabulating the budget for the 2022-23 fiscal year. It’s his fourth and final budget before the Quebécois head for polls in October.
Girard said that payments are not a curry vote, not helping the government win a second mission, but helping Quebecs survive the significant inflation that the government expects to reach 4.7% in 2022. Claimed to be. $ 3.2 billion.
“Indemnity is exceptional because inflation is exceptional,” Girard said of a $ 500 payment, adding that the government expects inflation to drop to 2.3% by the second half of 2023.
He added that the effects of the COVID-19 pandemic, supply chain bottlenecks, and Russia’s invasion of Ukraine have resulted in an overall increase in prices that are “higher and more durable than originally expected.”
“Rising gasoline prices are now. Food prices are rising,” Girard said, justifying the government’s decision to pay Quebecs instead of reducing income taxes. He added that tax cuts “while in the structural deficit” are not appropriate.
The Coalition Avenir Quebec government budget forecasts a deficit of $ 6.5 billion this year. That’s $ 2 billion less than last spring’s budget forecast. The operating deficit is projected to be $ 3 billion, but payments to a state-specific fund dedicated to debt reduction required by Quebec law will increase this figure by $ 3.5 billion.
Girard says the state is expected to return to a balanced budget by fiscal year 2027-28.
Quebec’s economy has recorded a “significant” recovery from the pandemic, the Finance Minister said. GDP shrank 5.5% in 2020 and then grew 6.3% in 2021. GDP growth is projected to reach 2.7% in 2022, he said.
The budget comes as a result of the government’s extraordinary spending to navigate the COVID-19 pandemic. The financial impact of the pandemic on the state is estimated to total $ 18.3 billion by fiscal year 2024-25.
The next year’s budget includes $ 3.7 billion in new spending, with programs aimed at restoring the post-pandemic health care system and promoting economic growth receiving the largest amount.
Total spending on the new program has been allocated to $ 22 billion over five years. This includes $ 8.9 billion for health systems, $ 2.8 billion for education programs, and $ 4.2 billion for programs that stimulate economic growth.
Girard painted a rosy picture of the state’s finances, but warned that the economy surrounding the potential resurgence of COVID-19, further supply chain disruptions, and the ongoing Russian invasion of Ukraine was uncertain.
He said the budget included a total of $ 8.5 billion in “significant contingencies” that could be used for health or economic spending over the next five years.
According to the budget, Ukraine accounts for only 0.3% of the state’s exports, so Quebec could be “less” affected by the war in Europe. But the war helped raise oil and food prices. And it will add to the existing inflationary pressure.
The government states that the state’s inflation rate reached 5.1% in January and 5.4% in February, which justifies direct payments to Quebec.
However, the opposition strongly opposed the decision to redistribute billions of dollars to people’s bank accounts in an attempt to win votes.
Free finance critic Carlos Reitao said the budget “seems to be structured to provide large payments to more than 6 million Quebecs in time for the election. There seems to be no further vision. . “
He suggested that the government was bribeing Quebecs with his own money and pointed out the fact that the government raised more than $ 3 billion in income tax for the 2021-22 fiscal year than expected.
“The Quebécois are funding those checks themselves,” he said.
Quebec solidarity financial critic Luba Ghazal has criticized the government for failing to act to curb the “wild west” of rising house prices, and co-spokesman Manon Massé has budgeted to deal with the climate crisis. He said it was of little use to do.
The government will spend $ 136.6 billion from 2022 to 2011, and $ 2.4 billion to support and recover COVID-19.
Revenues are estimated to increase 2.2% to $ 138.5 billion this year, and Girard budgets 6.3% and 5.4% increases in medical and school systems, respectively.
Quebec’s total debt, including financial market debt and severance pay for civil servants, is estimated at $ 215.3 billion, or 43.1% of GDP.
The state will receive a leveling payment of $ 13.7 billion this year, up 4.2%.
Morgan Raleigh
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