Quebec Economic Update: The Cheque is in the Mail!
After many years of austerity, the Quebec people will finally pass go and collect $200. Today, the Quebec Finance Minister released the government’s economic plan: Enabling Quebecers to Reap the Benefits of Growth. Quebecers will be going to the polls in October 2018 and they will be receiving, just in time for the election, a cheque from the Government that was designed to address the cost of school supplies. As well, retroactive to 2017, most Quebecers will see their tax burden diminish. After years of slowing down investment in the two big pillars of Health and Education, Quebec has decided to reinvest in these sectors with its surplus.
Here is an overview of what the Minister of Finance has for Quebecers:
- The Québec economy has accelerated sharply over the last two years. Growth in real gross domestic product (GDP) rose from 1.0% in 2015 to 1.4% in 2016. In 2017, real GDP growth will be 2.6%, an upward adjustment of 0.9 percentage points from the March 2017 forecast.
- The Government confirmed a balanced budget for 2016-2017 (as of March 2017) with a surplus of $2.4B. This means the government has shown a surplus for a second year in a row.
- In 2017-2018, the consolidated revenues will reach $106.5 billion, with growth of 3.5%, while the consolidated expenditures will stand at $104.2 billion, with growth of 5.7%, including 4.6% for program spending.
- For 2018-2019, the consolidated revenues will increase by 2.0% and the consolidated expenditures by 2.9%.
- The government is planning a balanced budget for the next three fiscal years.
Thanks to Quebec’s strong economic performance, the Liberal Government was able to announce a major reduction in personal income tax. Starting in 2017, individuals will see their tax burden reduced by nearly $2.3 billion per year. Once again, all taxpayers will benefit from a tax cut.
- From now on, the first dollar of earned income will be taxed at a lower rate, that is, 15% instead of 16%.
- In addition, families with school-aged children will receive financial assistance of $100 per child per year for back-to-school expenses.
Education and Health:
After years of slow growth in these sector, the Liberal Government will add $1.1 billion to improve educational outcomes and invest more in health:
- $337 million in education and childhood supports;
- $107 million in higher education;
- $630 million in health and social services.
Clearly the Liberal government is preparing the ground for the next election that will be held on October 1st, 2018. Although it is called an Economic Update, it looks more like a mini-budget as many measures directly target electors with specific initiatives that will have a visible impact on families. If you have two school-aged children, Premier Couillard will send two $100 cheques directly to home and you will receive this payment right before you go to the polling station next year (this is using a page from Stephen Harper’s playbook).
With Couillard’s Liberals neck and neck with the Coalition Avenir Quebec in the polls, the Liberal government will have only one more major card to play before the next election and it should come with the Spring budget in March 2018. Today was the launch of the what is now an 11 months-long electoral campaign in Quebec…. Game on.