Quebec showers cash on small businesses, families in election-year budget
With economy booming, Couillard government ramps up spending with eye on new mandate
Quebec's health care and education systems will see a major influx of cash in 2018 as the Couillard government prepares for a fall election campaign.
The government's fifth budget, tabled Tuesday, includes a 4.7-per cent increase in total spending, with new money and tax breaks for young families, seniors and small businesses.
The extension of the Montreal Metro's Blue line also took another step forward. The government set aside $365 million to plan the project.
Finance Minister Carlos Leitão bristled at a suggestion his government's $108-billion budget was part of an attempt to win over the electorate ahead of the Oct. 1 vote.
"We would never do that. I would never do that," he said in response to a question from a reporter.
"It's an election budget in the sense that it's an election year."
The dramatic increase in spending, he said, was made possible by the strongest provincial economy in nearly 20 years. GDP growth hit three per cent last year, far exceeding the predictions of economists.
"We are one of the leaders in Canada, and it is that economic growth that allows us to do what we are doing," he said.
After the lean years, the money flows
The budget includes measures aimed at improving the "quality of life" of Quebecers as the Couillard government tries to fend off the Coalition Avenir Québec, which is leading in the polls.
The province will make it easier to access a tax credit for those taking care of a senior living on their own, up to $533 per year. The maximum tax credit for non-subsidized daycare was boosted as well, from $9,000 to $9,500.
Education spending will jump by five per cent in the coming year, for a total of $18.9 billion, after being the target of cost-cutting measures earlier in the Couillard government's mandate.
The majority of that money is going to elementary and high schools, amid measures to hire more teachers and support staff.
The health sector, another area that saw its funding squeezed in prior years, will grow by 4.6 per cent.
Health Minister Gaétan Barrette said the emphasis would be on services. There is more money for nurse practitioners and mental health, and a special $300-million fund to ensure equal access to care across the province.
But the new measures, the opposition said, won't be enough to offset the pain introduced at the start of the government's mandate.
"They are trying to recuperate and make up for errors they made in the first years … It's not enough," said François Legault, leader of the Coalition Avenir Québec. He said the government should have done more to cut taxes.
Popular tax credits
The budget did include, however, the renewal of a popular tax credit for eco-friendly renovations introduced last year and another one for first-time homebuyers.
The biggest gains for individual taxpayers came last fall, when Leitão announced annual tax relief ranging from $278 for individuals to $756 for a family of four with a combined income of $88,000.
This time around it was small and medium-sized businesses that came out as big winners.
There is $259 million worth of tax relief headed their way, including a reduction in their contribution to the Health Services Fund, as well as increased tax credits for on-the-job training.
Those measures, and others aimed at fast-tracking skilled immigrants, pleased members of the business community, who worry the province's labour shortage could limit future economic growth.
"We have a government, I think, that's focusing in the right areas for reinvestment — the primary one being the education system and manpower training," said Michel Leblanc, president of the Montreal Chamber of Commerce.
"It's the first priority from the business community's point of view."
There was also $2 million set aside for the new Quebec secretariat tasked with dealing with issues affecting Quebec's anglophones, and a commitment of $24.5 million over six years if the Liberals are re-elected.
Geoffrey Chambers, vice-president of the Quebec Community Groups Network, praised the funding, saying "the fact that we're in this exercise is a really huge step forward."
The splurge in spending announced in Tuesday's budget shouldn't hide the fact the Liberals have taken steps throughout their mandate to correct the province's problem of chronic deficits, in the view of one public finance expert.
"What this minister decided to do [in the past] was address debt and limit spending, not knowing that the economy would be so strong. Nobody anticipated this kind of growth," said Marie-Soleil Tremblay, accounting professor at the École Nationale d'Administration Publique.
But Nicolas Marceau, the Parti Québécois' finance critic, was suspicious about the timing of the Liberal government's decision to turn on the spending taps.
"It was three years of cuts, followed by one year of candy, followed by the election," said Marceau, a finance minister under the previous PQ government.
The budget will be debated in the coming weeks before being put to a vote.