MONTREAL —
A lot has happened, to say the least, since Quebec’s last budget. A year later, the province is already well into “a new economy,” a phrase repeated several times in this year’s budget, unveiled Thursday by Finance Minister Éric Girard.
A new economy can be a bad and a good thing, depending on what exactly you mean by it.
“I used to have a boss who would say ‘each crisis is an opportunity,’” Girard said Thursday in response to a reporter’s question.
The province has made strides in areas like telemedicine and bolstering senior care, he said, and it will continue some of those transformations.
However, despite those sunny tones, Quebec’s new economy is also gloomier than last year’s. After hitting nearly 18 per cent unemployment in 2020, it has projected deficits for the next six years, requiring it to suspend a law requiring budgets to be balanced within five years.
It’s the first time in seven years Quebec hasn’t balanced the budget. Girard estimated that COVID-19 will end up costing Quebec a total of $30 billion.
While the province expects the economy to bounce back in 2022, with full employment by the end of that year, this is still “a pandemic budget,” he said bluntly.
“We’re in a pandemic; we’re in the worst recession since World War II,” he said.
The budget is full of fix-it measures meant to help repair some of the damage, including help to students, as well as other spending meant to stimulate, including infrastructure projects.
Where the money will all come from is somewhat uncertain—the government has, as it promised earlier this week, not raised taxes.
Instead, its estimates rest largely on the economy bouncing back. It also has a new plan to collect taxes on foreign goods sitting in Quebec warehouses, and a much bigger wish for increased federal health transfers.
But these measures both depend on Ottawa’s decisions, and there’s little sign Ottawa will agree to the health transfer bump.
THE NEW HEALTH CARE
On top of the massive spending of the last year, Quebec health care is set for another mammoth boost of cash: $10.3 billion over five years.
Much of that will go towards improving care for seniors in a more permanent way.
This was needed anyway, the province noted in its budget documents—COVID-19 just highlighted it. By 2030, a quarter of Quebec’s population will be over 65.
Spending in this area includes:
$2.2 billion to hire more orderlies and nurses for public care homes
$534 million to hire a manager for each public long-term care home
$750 million over four years to increase public home-support services
A major renovation effort for private seniors’ residences
An extra $95 million over four years for informal caregivers
Overall health-care staffing is also getting a lot of attention, with the province trying to retain its workers.
That includes the thousands of new orderlies trained during the pandemic, in three big cohorts, who were promised bonuses and will now see them gradually reduced, rather than suddenly cut off.
$1.8 billion to pay 10,000 new orderlies
$1.2 billion to convert the part-time orderlies to full-time
Quebec is also spending half a billion to improve access to front-line services, including “accelerating the digital shift,” and $288 million on mental health services.
CASH BREAKS, AND ACADEMIC HELP, FOR STUDENTS
Post-secondary students will get a break on their loans, getting one year interest-free, as well as a gift of $100 per semester for the current year.
It’s part of another massive spending plan of $1.5 billion for education to allow “every young person [to] reach his or her potential,” said Girard.
Enticing students to hit the books again isn’t just about fixing the damage of the last year, but about Quebec’s bigger hopes pinned to the economic recovery, Girard said.
“Education is part of increasing the economic potential of Quebec, and it’s very important,” he said.
There is also spending for younger students:
$170 million for tutoring
$125 to increase access to sports
$93 million on special needs classes
$80 million on school infrastructure
BUSINESSES AND WORKERS, INCLUDING THOSE OUT OF WORK
Quebec’s business sectors have all shifted, and for some of them the shifts will be permanent.
“Telework is here to stay,” said Treasury Board President Sonia LeBel on Thursday, adding that this will open “new horizons,” including the ability to spread work over a bigger variety of regions.
The province is putting $1.3 billion into high-speed internet, part of the provincial-federal program announced earlier this week, and part of its 2018 campaign platform.
Another half a billion is going into economic development across the regions.
There have been many less promising changes, too, including a mass movement of people dropping out of the workforce. The province will need to step in reverse this, said Girard.
Overall, $404 million is going towards this, including one effort of $246 million to integrate immigrants into the workforce.
Other sectors are also getting a boost:
$200 million to help “innovative” businesses including battery-makers and cybersecurity firms
More traditional industries, including restaurants are getting nearly the same amount over the next two years in aid.
WHERE’S THE MONEY COMING FROM?
Girard said earlier this week that he wouldn’t hike taxes, and he stuck to that plan—at least when it comes to Canadians.
But the province has another plan up its sleeve, to collect sales tax from foreign goods supplied through “fulfillment warehouses,” it explained.
In other words, companies like Amazon that store goods in Canada will be charged Quebec sales tax on the final purchases of products, as opposed to import taxes.
This would raise $1.8 billion of revenue over the next five years, the province said.
The program, however, is a federal one and relies on Ottawa to push it through. It was first announced in fall 2020 and it’s still unclear when it might come to pass.
The province is hoping for a much bigger lifeline from Ottawa in the form of increased federal health transfers, which would add up to $6 billion per year at the level Quebec proposes: 35 per cent of expenditures, up from 22 per cent.
However, the federal government won’t table its budget until April 19, and there’s no real indication it plans to make this wish come true.
Unlike Ontario, which also tabled its budget this week, Quebec even wrote that possibility into its budget plan, though Girard was careful to point out to reporters that he doesn’t have a line item for it.
“There’s no number attached to federal transfers,” Girard said. “There’s a request.”
Overall, many “elements will be pertinent” in deciding how much revenue Quebec can bring in, including how fast the economy gets back to speed, he said.
“It will depend. If the economy is stronger, if it [catches up], we’ll have less need of the other elements.”
Girard and LeBel faced several questions over funding to stop the spate of domestic violence Quebec has recently seen, including seven murders of women in the last seven weeks.
Thursday’s budget included only $22.5 million over five years to add shelter space for women facing violence at home.
Girard said it should add 30 per cent to the amounts given to shelters. But facing questioning, he said several times that more cash may be given to the issue if needed.
“Listen, it’s a situation that’s extremely serious,” he said. “And if there are more sums necessary, we’ll allocate them.”
Social housing also got some new money: $408 million, meant to fund 5,500 new units.
Quebec’s major cities, however, have said the need is much greater. In Montreal alone, the municipal government plans to build 12,000 units over the course of its mandate, and the city has 150,000 households waiting for affordable housing.
OTTAWA – The parliamentary budget officer says the federal government likely failed to keep its deficit below its promised $40 billion cap in the last fiscal year.
However the PBO also projects in its latest economic and fiscal outlook today that weak economic growth this year will begin to rebound in 2025.
The budget watchdog estimates in its report that the federal government posted a $46.8 billion deficit for the 2023-24 fiscal year.
Finance Minister Chrystia Freeland pledged a year ago to keep the deficit capped at $40 billion and in her spring budget said the deficit for 2023-24 stayed in line with that promise.
The final tally of the last year’s deficit will be confirmed when the government publishes its annual public accounts report this fall.
The PBO says economic growth will remain tepid this year but will rebound in 2025 as the Bank of Canada’s interest rate cuts stimulate spending and business investment.
This report by The Canadian Press was first published Oct. 17, 2024.
OTTAWA – Statistics Canada says the level of food insecurity increased in 2022 as inflation hit peak levels.
In a report using data from the Canadian community health survey, the agency says 15.6 per cent of households experienced some level of food insecurity in 2022 after being relatively stable from 2017 to 2021.
The reading was up from 9.6 per cent in 2017 and 11.6 per cent in 2018.
Statistics Canada says the prevalence of household food insecurity was slightly lower and stable during the pandemic years as it fell to 8.5 per cent in the fall of 2020 and 9.1 per cent in 2021.
In addition to an increase in the prevalence of food insecurity in 2022, the agency says there was an increase in the severity as more households reported moderate or severe food insecurity.
It also noted an increase in the number of Canadians living in moderately or severely food insecure households was also seen in the Canadian income survey data collected in the first half of 2023.
This report by The Canadian Press was first published Oct 16, 2024.
OTTAWA – Statistics Canada says manufacturing sales in August fell to their lowest level since January 2022 as sales in the primary metal and petroleum and coal product subsectors fell.
The agency says manufacturing sales fell 1.3 per cent to $69.4 billion in August, after rising 1.1 per cent in July.
The drop came as sales in the primary metal subsector dropped 6.4 per cent to $5.3 billion in August, on lower prices and lower volumes.
Sales in the petroleum and coal product subsector fell 3.7 per cent to $7.8 billion in August on lower prices.
Meanwhile, sales of aerospace products and parts rose 7.3 per cent to $2.7 billion in August and wood product sales increased 3.8 per cent to $3.1 billion.
Overall manufacturing sales in constant dollars fell 0.8 per cent in August.
This report by The Canadian Press was first published Oct. 16, 2024.
