Couillard and Leitão vow four more balanced budgets
Four more years of balanced budgets and increased spending on health and education — that’s what Liberal Leader Philippe Couillard promised voters on Wednesday as his party released its financial framework for the mandate it hopes to win on Oct. 1.
“What we’re saying today is we’re guaranteeing stable and predictable funding in health care and education,” Couillard said.
“We will not proceed with further tax cuts unless we are sure that the funding of public services is well run.”
The plan includes the total cost estimates of the promises that the Liberals have made — or are going to make — during the campaign.
Those promises are expected to cost $1.348 billion in 2018-19, a figure that will rise steadily over the following four years, reaching $2.449 billion in 2022-23.
The largest single spending increase is a promise to give families annual cheques of between $150 and $300 per child, which will cost an estimated $380 million a year.
The promise to increase education spending by at least four per cent a year would cost $41 million in 2019-20, a figure that would rise to $426 million by 2022-23. In total, that promise would cost $858 million over four years.
A promise to increase health spending by at least 4.2 per cent a year would cost $84 million in 2019-20 and would rise to $460 million in 2022-23. In total, that promise would cost $1.045 billion.
Couillard said those two promises will give managers in the healthcare and education systems the ability to plan for the future.
“The worst thing for education and health-care managers is lack of predictability, peak and trough kind of budgeting which prevents them from hiring teachers and doctors and nurses because they don’t know what next year will bring,” he said.
The framework is based around the idea that the province’s economy will continue to grow — though at a slower rate than this year and last.
The Liberals are forecasting that the real gross domestic product — GDP controlled for inflation — will rise by an average of 1.55 per cent a year between 2019 and 2022.
Nominal GDP — uncontrolled for inflation — is forecast to rise by 3.225 per cent between 2019 and 2022.
Government revenue is expected to rise in line with that, an average of 3.525 per cent per year during that period.
The numbers are slightly higher than those in the auditor general’s pre-election report, the result of stronger than expected economic growth during the 2½ months following the period the report was created, the Liberals said.
That forecasted increase includes the expectation that economic growth — and the lower unemployment rate in Quebec — will lead to increased tax revenue.
The plan forecasts that budget surpluses will rise from $904 million in 2018-19 to $3.5 billion in 2022-23. Those surpluses will be invested in the Generations Fund to pay down the public debt.
The province’s “bad debt” — the debt from accumulated deficits, which represents the difference between the government’s assets and liabilities — is forecast to decrease from $115.1 billion in 2018 to $100 billion in 2023.
Gross debt — which includes debt from accumulated deficits, as well as pension liabilities and infrastructure that is being paid for over time — will rise from $201.07 billion in 2018 to $215.5 billion in 2023.
However, it will decrease from 48.5 per cent of GDP in 2018 to 43.9 per cent of GDP in 2023, according to the forecast.
The plan includes a buffer of over $800 million a year. When that’s combined with the government’s stabilization reserve, Couillard said, a re-elected Liberal government would have a total reserve of $8 billion between now and mid2023 in case the economy does not perform as planned.
“We kept money in our reserves for that,” Couillard said. “So it’s not as if we are naked without any buffer; we have what we need in case the economy turns south or we have trade issues that are worse than what we expect.”
While there are no tax cuts built into the plan, Couillard said his government would cut taxes if things go better than expected.
After four consecutive balanced budgets, Couillard said his financial framework has more credibility than the financial plan released by the Coalition Avenir Québec.
“It rests on real money, not Monopoly money. It doesn’t rest on the hypothetical reduction of $4 billion of government expenses that no one can actually detail. It’s only based on money we know we have.”