Budgetary overrun foreseen at twice estimate
Marceau blames Liberals for increase to $1.6 billion
Quebec’s budgetary overrun this fiscal year will be $1.6 billion, or double the estimate of the Liberal government, which also allowed spending on major projects to skyrocket, Quebec Finance Minister Nicolas Marceau said Friday.
“The Liberals lost control of the ship,” the Parti Québécois’s rookie finance and economic development minister told reporters.
The PQ’s follow-through on its pledge to close the Gentilly-2 nuclear plant was “a good economic decision,” he said.
The cost of the closure will translate into a one-time writedown of about $1.7 billion, an amount that will show up on the books but not affect the province’s spending power or its credit rating, he said.
“What matters for Moody’s, Standard & Poor’s and others is the trajectory of our expenditures and the trajectory of our revenues,” Marceau said in an interview.
The new provincial government still anticipates meeting the forecast budget deficit of $1.5 billion for fiscal year 2012-2013 and a zero deficit the following year, Marceau said.
He refused to discuss how his government would replace $1 billion in annual revenue from the $200 health tax that a campaigning PQ promised to abolish.
Nor would he disclose his views on retroactive tax increases, something he has floated as a way to offset that lost revenue.
All will become clear Wednesday when he presents cabinet with his plan, Marceau said.
He and Treasury Board president Stéphane Bédard told reporters that the costs of the province’s major infrastructure projects have ballooned in recent years.
For example, the cost of the Route 167 extension into the Otish Mountains area of the James Bay region — part of former premier Jean Charest’s Plan Nord development venture — has jumped from $260 million to $470 million and it is far from com- plete, Bédard said.
An external firm will investigate on behalf of Infrastructure-Québec, Bédard said.
He accused the Liberals of being spendthrift ahead of the recent election that saw the Liberals relinquish power after nine years.
“By all accounts, their agenda seemed much more electoral than financial,” Bédard said.
“They opted for pleasing the population instead of doing what they should have been doing.”
Liberal reaction was swift and dismissive.
The PQ government is acting like a “chicken with its head cut off,” said Sam Hamad, the party’s Treasury Board critic.
“Every year, there are unforeseen costs, but to respect the budget, cuts are made elsewhere. We did that for nine years. It’s the norm.”