Liberals leave CAQ $3-billion surplus

QUEBEC The new Coalition Avenir Québec government has found a pleasant surprise left for it by the Liberals — the province is rolling in dough.

Releasing a monthly report on the state of the province’s finances covering the first five months of the fiscal year, Finance Minister Éric Girard revealed he’s inherited a $3-billion surplus from his predecessor Carlos Leitão.

It is exactly the opposite of what incoming governments usually find. When the Liberals took over from the Parti Québécois in 2014, they found a deficit of $7 billion.

They said that unpleasant surprise forced them to take unpopular austerity measures, which ultimately were a factor in their downfall Oct. 1.

The CAQ expected to find things in decent shape. Before the election, the province’s auditor-general tabled an independent report stating the Liberals had the finances under control.

But describing himself as “cautious by nature,” Girard said he doesn’t expect the number to be that high by the end of the full year, once all spending and revenue figures come in.

He said it would be “inappropriate to extrapolate” the year’s situation based on the numbers covering the period from April 1 to Aug. 31.

“I don’t anticipate we will have $3 billion over a horizon of 12 months,” Girard said in a telephone conference call with reporters. “We anticipate that the evolution of revenues and spending will be such that this surplus will disappear.”

There are many reasons for the good news. For one thing, Quebec’s economy was stronger at the beginning of the year than the Liberals anticipated. The stronger economy explains why Quebec’s source revenues, mainly from taxes, are higher than forecast. They have shot up by 7.2 per cent compared to the year earlier.

In fact, Girard revealed all the government’s revenues, from crown corporations to sales taxes, are higher than forecast.

Girard, however, was cagey when asked how much of the surplus would find its way back to taxpayers. The CAQ government campaigned saying it would put more money in the pockets for Quebecers.