Yahoo Finance Quebec on track to balance books in 2016, finance minister reports
Finance Minister Carlos Leitao provided an economic and fiscal update Thursday that shows Quebec is on track for a balanced budget in 2016.
In its June 2014 budget, the province had forecast a budget deficit of $2.35 billion. By the time it released its 2015-2016 economic plan, last March 26, it had reduced that forecast deficit to $1.1 billion – largely by reining in spending.
"We have had to make decisions that have, at times, been difficult but keeping in mind that citizens will benefit," said Leitao.
Loosening strings for students
With a balanced budget on the horizon, Leitao said the government will re-invest $100 million in education over the coming months: $20 million this fiscal year and an additional $80 million annually, beginning in 2016-2017.
Those amounts represent an increase in education spending of just .12 per cent for the rest of this fiscal year and .5 per cent next year.
However, that gesture should help soften the Couillard government's image in the wake of unpopular austerity measures.
Conscious of the fact expired contracts with teachers and other public sector workers are still not settled, the finance minister made it clear that the new spending will go to front-line services for students most in need – and not to teachers' salaries.
Other highlights include:
- Higher than anticipated economic growth compared to the rest of Canada (1.5 per cent this year and 1.7 per cent projected for 2016)
- 58,500 jobs created between May and October 2015
In the March 2015 budget, the books were to be balanced with no tax hike.
At the time it tabled that $100-billion budget, the Ministry of Finance also forecast two per cent growth in 2015 and 2016 – a figure which Leitao admitted Thursday his ministry has had to scale back.
"I'm not too worried about that," Leitao said. "Our fiscal plan is built upon what I think are fairly conservative and prudent economic assumptions."
Fiscal health 'deteriorating': PQ
Contrary to Leitao's rosy fiscal picture, the opposition critic for finance, Parti Québécois MNA Nicolas Marceau, said an increase in the debt to GDP ratio shows, in fact, the province's fiscal health is deteriorating.
"Nothing is dealt with when it comes to public finances," Marceau said, dismissing as insignificant the extra money Leitao said he has found for front-line education services.
That was echoed by François Bonnardel, the finance critic for the Coalition Avenir Québec.
"Having $100 million [more] in education is a small amount," Bonnardel said. "We need a lot more over the next years."
Québec Solidaire spokesperson, MNA Amir Khadir, went further still.
"In fact, what they say [is], 'We have planted a sword – a knife – in public education. Now, we're going just retract [it] a few millimetres.'"
