PQ leader Pauline Marois speaks at the National Assembly. (Clément Allard/Canadian Press) The Opposition Parti Quebecois is warning the provincial government not to raise its sales tax until Quebec has emerged from the effects of the recession.
As members of Quebec's National Assembly resumed work for the fall session, Premier Jean Charest confirmed the province is considering a one per cent sales tax increase in the spring to help offset the province's $3.9-billion deficit.
The increase would be in addition to the one percentage point increase already planned for January 2011.
Though she pushed for an increase in the QST when the federal government announced a one percentage point cut in the GST last year, PQ leader Pauline Marois said the government should hold off until the economy has stabilized.
"It's a major impact on the economy, so maybe it's not a very good idea."
Quebec needs revenue
Finance Minister Raymond Bachand downplayed the issue, saying no measures would be taken "until and unless the economic recovery is solid and stable — which is not the case today."
But, Laurentian Bank economist Sébastien Lavoie said the government clearly needs the money.
"Quebec needs somehow to either raise tax or cut on the spending front to eventually narrow the deficit."
In its last budget, the Charest government announced its intention to increase the QST from 7.5 per cent to 8.5 per cent starting Jan. 1, 2011. The government said user fees, except daycare, would also be indexed to the rate of inflation.
The province said it expected to post deficit budgets for the next four years.
Lavoie said he expects Quebec's deficit to jump to about $6 billion dollars by the spring.
A one percentage point increase in the QST represents approximately $1-billion in revenue for the government.
