With markets reeling, can Quebec's budget offset uncertainty? Yes, says Legault

Quebec's finance minister will table his government's annual budget one day after global markets cratered. Eric Girard is hoping the spending plan he finished three weeks ago will stand up to the growing economic insecurity. 

But opposition calls for $1 billion contingency fund to deal to economic effects of coronavirus

Quebec Premier François Legault says Quebec's economy can withstand the uncertainty over the novel coronavirus that is causing turmoil in the world's financial markets. (Ryan Remiorz/The Canadian Press)

The 2020-21 budget was tabled on March 10. Read our latest story here: Quebec government tries to go green in new budget, pushing public transit and electric cars

One day after global markets cratered, Quebec's finance minister will table his government's annual budget, hoping the spending plan he finished three weeks ago is still relevant in the face of growing economic insecurity.

Eric Girard took part Monday in the traditional pre-budget day spectacle that sees the finance minister buy a new pair of shoes. 

Girard opted instead for new blades on an old pair of hockey skates. It symbolized, he said, Quebec's desire to catch up to Ontario's economy and the environmental focus of Tuesday's budget (recycling, get it?). 

But as Girard was engaging in heavy-handed symbolism, the Toronto Stock Exchange, along with markets around the world, were undergoing one of their most dramatic sell-offs in recent history. 

Investors, already nervous about the economics effects of the coronavirus outbreak, panicked at news that Saudi Arabia was removing production caps on oil, sending the price of crude tumbling more than 25 per cent.

Girard said Quebec's budget, which will be tabled Tuesday afternoon in the National Assembly, was finalized last month, and doesn't contain any specific measures to deal with a slowdown triggered by the virus. 

The government's finances, he said, are already well-equipped to handle an economic emergency.

Instead of the traditional new pair of shoes, Girard opted instead for new blades on an old pair of hockey skates. It symbolized, he said, Quebec's desire to catch-up to Ontario's economy and the environmental focus of Tuesday's budget. (Sylvain Roy Roussel/CBC)

"The Quebec economy's going to be resilient in the face of these challenges," said Girard. 

"The budget is a structural plan to improve the competitiveness of businesses, to help the economy reach its full potential, to invest in services, health care and education. We're doing that."

Quebec ready to stimulate economy: Legault

Quebec is expected to have a surplus of between $1.5 and $2 billion heading into the coming financial year. Girard said the extra money could help alleviate any economic strain global uncertainty puts on the province's economy. 

"If private demand is weak and we need to support it with more public spending, we have the capabilities to do that in due time," said Girard.

While Girard was otherwise tight-lipped about what his budget will contain, Premier François Legault suggested there would be enough new infrastructure funding to compensate for slower economic growth. 

"In the budget, we planned significant expenses for the operations of larger ministries. We also planned for significant expenses in infrastructure," Legault said.

"I think the government has to make an effort to stimulate the economy in this period of economic uncertainty."

Quebec has stabilization reserve of between $13 and $14 billion in case of economic emergencies. Legault said he would consider tapping into it if things get worse.

Consider a contingency fund: Liberals

The Liberal finance critic, Carlos Leitão, called on the government to develop a special contingency fund of $1 billion to contain the spread of COVID-19 in Quebec. 

"Public health should not be constrained by any sort of financial constraint. If public health needs 'X' millions of dollars to create special clinics or special tests, or whatever it is, they should have all the funds that they need," Leitão said. 

Specialist Glenn Carell, right, works on the floor of the New York Stock Exchange, Monday, March 9, 2020. Stocks went into a steep slide Monday on Wall Street as coronavirus fears and a crash in oil prices spread alarm through the market, triggering the first automatic trading halt in over two decades. (Richard Drew/Associated Press)

"This is not an issue that should be prone to partisan politics." 

Leitão said the $1 billion contingency fund he is calling for would also help protect the government in case of a supply shock effect, such as a collapse in oil prices.

But Girard said it was too late to include a dedicated fund in his budget: "The numbers were finalized three weeks ago, so last-minute ideas or interesting suggestions are not applicable at this point."

With files from Cathy Senay


To encourage thoughtful and respectful conversations, first and last names will appear with each submission to CBC/Radio-Canada's online communities (except in children and youth-oriented communities). Pseudonyms will no longer be permitted.

By submitting a comment, you accept that CBC has the right to reproduce and publish that comment in whole or in part, in any manner CBC chooses. Please note that CBC does not endorse the opinions expressed in comments. Comments on this story are moderated according to our Submission Guidelines. Comments are welcome while open. We reserve the right to close comments at any time.

Become a CBC Account Holder

Join the conversation  Create account

Already have an account?