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Quebec Budget 2018

Published on
March 28, 2018

Quebec Finance Minister Carlos Leitão tabled Tuesday his last budget in the National Assembly ahead of the October provincial election.

The government hopes this election-friendly budget will appeal to families, the middle class and small and medium-sized businesses.

With this budget, Québec is making a substantial debt repayment. As at March 31, 2018, the debt will represent 49.6% of GDP, a substantial decrease from the peak of 54.3% reached in 2015. In addition, starting in 2018-2019, the government is going to repay the debt at a rate of $2 billion per year, using the Generations Fund, that is, $10 billion over the next five years.

The government is increasing the appropriations allocated to education and higher education by 5% in 2018-2019. Over $9 billion will be allocated to preschool, elementary and secondary educational institutions. Nearly $7 billion will be injected into higher education infrastructure.

The government is increasing the funds allocated to the health and social services network by 5.3% in 2018-2019. As of 2018-2019 they will inject $300 million a year with a goal of ensuring that Quebecers in every region have similar access to frontline and specialized services.

Also, as part of its pre-election announcements, the 2018-2028 Québec Infrastructure Plan includes $18.7 billion in investments in the health and social services network. The total Infrastructure Plan is increased by $9.3 billion relative to the original 2017-2027 plan and now total $100.4 billion

Quebec will prioritize three major strategic transportation projects representing a total investment of $13.5 billion by the province, the federal government and their municipal partners: — $6.3 billion for the Réseau express métropolitain; — $3.9 billion for the extension of the Montréal metro blue line; and — $3.3 billion for the strategic transportation network in Québec (highways).

The government is allocating $845 million by 2022-2023 to increase the public transit capacity throughout Québec.

The government is setting aside $73 million by 2022-2023 to support regional air transportation. The government will also invest $100 million over the next four years to modernize and develop regional airports.

The government is allocating nearly $430 million for measures respecting cleaner, higher-performance land transportation. Investments of nearly $900 million are earmarked in the Québec Infrastructure Plan for the refurbishment of the Louis-Hippolyte-La Fontaine Tunnel.

The government announced a tax relief of $2.2 billion for Small and medium-sized businesses by 2022- 2023.

By 2022-2023, the government is allocating additional funding of close to $2.4 billion to support innovation and digital transformation, as well as the acceleration of business investment.

Over the next five years, the government will allocate additional means of $724 million to initiatives supporting the economic development of all regions.

Québec’s Maritime Strategy is a large-scale economic project. Initiatives totalling nearly $2 billion, relative to the first action plan under the strategy, have already been announced. By 2030, these initiatives will foster the creation of over 30 000 direct jobs, as well as public and private investment of approximately $9 billion.

An amount of $2.2 million will be reserved for conducting a study concerning the possible extension of the gas network to the Saguenay–Lac-Saint-Jean region.

Over the next five years, over $260 million will be allocated to the energy transition and the fight against climate change.

From now to 2022-2023, the government is allocating nearly $600 million more in funding to give families more quality time and to support informal caregivers and seniors.

By 2022-2023, the government will allocate over $800 million more to various measures under the labour strategy.

Over the next five years, Québec will invest $539 million in culture, the artistic community and cultural organizations.

The government is also providing an additional $48 million for Aboriginal communities by 2022-2023, to ensure better living conditions for them.

Over the next five years, $24.5 million will be allocated for initiatives of the Secrétariat aux relations avec les Québécois d’expression anglaise. Ironically, the name of this office is the only French text in the English version of the budget.

The opposition parties have, predictably, denounced this budget, which they say it means the return to austerity if the Liberals are being re-elected. "Today is the distribution of sweets, but October 2, it will be the return of the cuts. This is the Liberal cycle, "said Nicolas Marceau, Official Opposition Finance Critic for the Parti Quebecois. "For the past four years, the Liberals have done two things: cutting services and taking money out of Quebecers' wallets," said Francois Legault, head of the Coalition avenir Québec (CAQ).

Conclusion

With this final budget from Quebec Finance Minister Carlos Leitão, the table is now set for the provincial election coming in October. The Quebec government is distributing goodies left and right – with the obvious caveat that one will have to vote for the Liberals to bring them to fruition since much of the spending is expressed in terms of a full five-year commitment. Bittersweetly – this government has managed the finances of the province relatively well and is in strong fiscal shape to make the types of promises seen in this Budget without adding to the province’s debt but remains well back of the CAQ in opinion polling. In fact, despite all of the spending promises the budget plans to reduce Quebecers' debt by $ 10 billion over 10 years. This budget, which has been received by the majority of economic and social players in Quebec, will give the opposition parties less to shoot at and will force them to fall back on the troubles in the health system to attack the record of the Liberal government of Philippe Couillard.

Brett James
Principal
Brett James has been a partner and principal of Sussex Strategy Group since 2000. Brett provides clients with strategic counsel on major business issues, informed and intelligent guidance on their government interaction and communications advice to leverage public opinion on issues affected by government decisions.
Hugues Théorêt
Senior Associate
Hugues Théorêt is a Senior Associate based in the Ottawa. He has served as a Senior Advisor in the Quebec Government Office in Ottawa for 10 years, and brings a wealth of understanding and experience in Government Affairs, media relations and federal politics.
Morva Rohani
Policy and Research Lead
Morva leads research and analysis for Ontario and Federal government relations at Sussex Strategy Group. Morva regularly monitors the activities of the federal and provincial governments, providing research, analysis and policy alternatives for clients.
Liam Daly
Associate
Liam is an Associate based in the Ottawa Office. His work primarily focuses on research, logistics, advocacy, and issues management as part of the Federal Government Relations team.
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