QUEBEC — Following up on those pre-Christmas cheques for millions of Quebecers, the Legault government now is coming to the aid of seniors struggling with the cost of living.
Economy
Quebec looking at $8-billion contingency fund ‘for economic risks’
Tabling his fall economic update Thursday, Finance Minister Eric Girard confirmed previously announced plans to increase the maximum amount of the refundable senior assistance tax credit from $411 a year to $2,000, beginning this year.
The measure applies to those 70 and older who already receive this tax credit, and adds to the list of eligible recipients, Girard said. The news means an additional 398,500 seniors will have access to the credit, for a total of 1.1 million people.
If you add all the previous measures announced for 2022, the total relief for eligible seniors living alone will be $3,100. For a couple, the amount is $2,200.
Girard has also announced a plan to index the income tax system and social assistance programs to reflect increases in the prices of goods and services, to the level of 6.44 per cent. That indexation kicks in Jan. 1 and represents an additional $2.3 billion in relief.
But one day before the National Assembly recesses for Christmas, Girard’s update confirmed what he has been saying for weeks: Quebec’s economy is slowing down at an alarming rate, with little relief in sight in the short term.
“The economic outlook for Quebec and Canada has deteriorated quickly,” the update states. “A high degree of uncertainty hangs over the economic and financial forecast.”
The document spells things out bluntly: Quebec’s economic growth is expected to slow from 3.1 per cent in 2022 to 0.7 per cent in 2023. In his March budget, Girard had predicted two per cent growth for 2023.
And while Girard says he believes inflation peaked at eight per cent in June, the full effects of the slowdown and increases in lending rates by the central bank have yet to be felt.
As a precaution, he included the alternative scenario featuring an $8-billion contingency fund over five years.
“We believe the recession is, more or less, within a 50 per cent probability,” Girard told reporters at a news conference. “It’s good policy to have provisions for contingencies, whether they are pandemic- or economic-related.”
Under the recession scenario, economic activity would decline by one per cent in 2023 before increasing by 1.2 per cent in 2024. The overall negative impact on Quebec’s finances would be a whopping $5 billion in 2023, which would lead to a $4.1-billion deficit in 2023-24.
“For individuals, we have suggested if the economy slows down, it is the appropriate time for a fiscal stimulus,” Girard noted. “The fiscal stimulus we have highlighted as possible would be an income tax reduction.”
In the last election, the CAQ pledged an income tax cut — a promise restated by Premier François Legault in his interview with the Montreal Gazette last month.
For now, Girard’s budgetary deficit projection for 2022-23 remains lower than he said it would be in the March budget. That’s because that same high inflation rate has driven up Quebec’s own source revenues by about $14 billion.
Girard is also able to lower a projected $6.5-billion deficit for 2022-23 to $5.2 billion, including a mandatory contribution to the debt-reducing Generations Fund. Quebec is still on track to balance its books by 2027-28, Girard said.
The update represents a followup to a series of other measures promised by the CAQ during the election campaign to help Quebecers deal with inflation.
Up first were cheques of $400 to $600 for citizens who earned less than $100,000 in 2021. A Revenue Quebec spokesperson told the Montreal Gazette Thursday that more than half of the payments — in the form of direct deposit or paper cheques — have already been sent.
Two promised cost-of-living bills have also been tabled by the CAQ and should be adopted before the legislature recesses Friday. Bill 1 slaps a three per cent ceiling on government fee increases, while Bill 2 imposes the same ceiling on hydro rates.
The opposition parties were not impressed, with Québec solidaire saying the update does not include enough specific relief measures for citizens. QS wanted Quebec to immediately increase the minimum wage from $14.25 to $18 an hour and freeze all government fees.
“It’s not generous enough, it’s not targeted enough,” added Liberal finance critic Frédéric Beauchemin. He noted seniors will have to wait until they do their income taxes in order to get the CAQ tax credit, when they need the money now.
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VICTORIA – British Columbia is forecasting a record budget deficit and a rising debt of almost $129 billion less than two weeks before the start of a provincial election campaign where economic stability and future progress are expected to be major issues.
Finance Minister Katrine Conroy, who has announced her retirement and will not seek re-election in the Oct. 19 vote, said Tuesday her final budget update as minister predicts a deficit of $8.9 billion, up $1.1 billion from a forecast she made earlier this year.
Conroy said she acknowledges “challenges” facing B.C., including three consecutive deficit budgets, but expected improved economic growth where the province will start to “turn a corner.”
The $8.9 billion deficit forecast for 2024-2025 is followed by annual deficit projections of $6.7 billion and $6.1 billion in 2026-2027, Conroy said at a news conference outlining the government’s first quarterly financial update.
Conroy said lower corporate income tax and natural resource revenues and the increased cost of fighting wildfires have had some of the largest impacts on the budget.
“I want to acknowledge the economic uncertainties,” she said. “While global inflation is showing signs of easing and we’ve seen cuts to the Bank of Canada interest rates, we know that the challenges are not over.”
Conroy said wildfire response costs are expected to total $886 million this year, more than $650 million higher than originally forecast.
Corporate income tax revenue is forecast to be $638 million lower as a result of federal government updates and natural resource revenues are down $299 million due to lower prices for natural gas, lumber and electricity, she said.
Debt-servicing costs are also forecast to be $344 million higher due to the larger debt balance, the current interest rate and accelerated borrowing to ensure services and capital projects are maintained through the province’s election period, said Conroy.
B.C.’s economic growth is expected to strengthen over the next three years, but the timing of a return to a balanced budget will fall to another minister, said Conroy, who was addressing what likely would be her last news conference as Minister of Finance.
The election is expected to be called on Sept. 21, with the vote set for Oct. 19.
“While we are a strong province, people are facing challenges,” she said. “We have never shied away from taking those challenges head on, because we want to keep British Columbians secure and help them build good lives now and for the long term. With the investments we’re making and the actions we’re taking to support people and build a stronger economy, we’ve started to turn a corner.”
Premier David Eby said before the fiscal forecast was released Tuesday that the New Democrat government remains committed to providing services and supports for people in British Columbia and cuts are not on his agenda.
Eby said people have been hurt by high interest costs and the province is facing budget pressures connected to low resource prices, high wildfire costs and struggling global economies.
The premier said that now is not the time to reduce supports and services for people.
Last month’s year-end report for the 2023-2024 budget saw the province post a budget deficit of $5.035 billion, down from the previous forecast of $5.9 billion.
Eby said he expects government financial priorities to become a major issue during the upcoming election, with the NDP pledging to continue to fund services and the B.C. Conservatives looking to make cuts.
This report by The Canadian Press was first published Sept. 10, 2024.
Note to readers: This is a corrected story. A previous version said the debt would be going up to more than $129 billion. In fact, it will be almost $129 billion.
The Canadian Press. All rights reserved.
NANAIMO, B.C. – Former Bank of Canada governor Mark Carney says he’ll be advising the Liberal party to flip some the challenges posed by an increasingly divided and dangerous world into an economic opportunity for Canada.
But he won’t say what his specific advice will be on economic issues that are politically divisive in Canada, like the carbon tax.
He presented his vision for the Liberals’ economic policy at the party’s caucus retreat in Nanaimo, B.C. today, after he agreed to help the party prepare for the next election as chair of a Liberal task force on economic growth.
Carney has been touted as a possible leadership contender to replace Justin Trudeau, who has said he has tried to coax Carney into politics for years.
Carney says if the prime minister asks him to do something he will do it to the best of his ability, but won’t elaborate on whether the new adviser role could lead to him adding his name to a ballot in the next election.
Finance Minister Chrystia Freeland says she has been taking advice from Carney for years, and that his new position won’t infringe on her role.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
HALIFAX – The Nova Scotia government has introduced a bill that would kick-start the province’s offshore wind industry without federal approval.
Natural Resources Minister Tory Rushton says amendments within a new omnibus bill introduced today will help ensure Nova Scotia meets its goal of launching a first call for offshore wind bids next year.
The province wants to offer project licences by 2030 to develop a total of five gigawatts of power from offshore wind.
Rushton says normally the province would wait for the federal government to adopt legislation establishing a wind industry off Canada’s East Coast, but that process has been “progressing slowly.”
Federal legislation that would enable the development of offshore wind farms in Nova Scotia and Newfoundland and Labrador has passed through the first and second reading in the Senate, and is currently under consideration in committee.
Rushton says the Nova Scotia bill mirrors the federal legislation and would prevent the province’s offshore wind industry from being held up in Ottawa.
This report by The Canadian Press was first published Sept. 10, 2024.
The Canadian Press. All rights reserved.
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