Education to get $100M boost
But opposition labels Quebec’s announcement a ‘cynical gesture’
With Quebecers growing increasingly weary of austerity, the government has decided to cut them some slack — announcing plans Thursday to pour additional millions into the education system.
But the opposition parties rapidly described the spending announcement — included in the November economic update — as a “cynical gesture and a joke,” after two years of asking Quebecers to make sacrifices and telling public sector unions the pantry is bare.
Late Thursday, Le Devoir reported the government is nevertheless cranking up the pressure and wants to sign an agreement in principle with the Common Front by Sunday evening before Premier Philippe Couillard jets off to Paris for the climate change conference.
A spokesperson for Treasury Board President Martin Coiteux — who is responsible for negotiations — confirmed intensive talks with the 500,000-member public sector are underway.
“The government has always said it wants a negotiated agreement before Christmas,” the official said.
Earlier, releasing an economic update which globally shows the province’s finances are starting to turn around, Quebec Finance Minister Carlos Leitão seized the opportunity to give the cash-strapped education sector a break.
Leitão announced the government will invest an additional $20 million in the education system before the end of this fiscal year, March 31, and an additional $80 million for 2016-17. The money is designated for front line services, not salary increases.
Explaining the surprise increases, Leitão said the main reason Quebec has the money is that its forecast deficit for 2014-15 will wind up $1.207 billion lower than projected. Last March’s budget forecast a deficit of $2.35 billion. It actually will be $1.143 billion.
Quebec’s frugal spending — $362 million less than projected in program spending and $884 million less in other spending such as debt financing — is allowing it to loosen the purse strings.
The amount might not make a big difference after the massive spending cuts of the last few years but Leitão was spinning the update as “good news” for Quebecers.
“We have truly retaken control of public finances,” Leitão said at a news conference where he released the update. “Simply put, we are spending less than we earn, which is a good thing.”
Leitão bristled when the word austerity was used by a reporter, arguing that Quebec’s spending as a percentage of the economic growth rate is the same as it was in 1990s recession period.
“Thus, there was no demolition of the Quebec model,” Leitão said. “There has not been any toxic austerity or otherwise.”
But wary of the optics of coming up with spare change now, Finance Department officials at an earlier briefing were bending over backwards to stress the additional funding is for “direct services” to students, not salaries.
Leitão had the same message — insisting there is no extra money in the bank.
“We have taken into account our counter-offer (to the public sector) in the current fiscal plan,” Leitäo told reporters. “But not more than that.”
The money will be put toward academic success and will allow school boards to hire teaching staff and professionals as well as boost technical resources — particularly in underprivileged and struggling communities.
François Blais, the minister of education, is to outline the details of the new spending at a later date.
It represents a 0.9 per cent increase in spending in education for 2015 and 1.9 per cent in 2016. Officials said the full amount is the equivalent of 800 new jobs but could not elaborate.
Leitão had other good news, confirming the Liberal government’s objective of balancing the province’s books by 2015-16 is maintained even if he has had to scale back economic growth projections.
The last budget forecast 2 per cent economic growth. Leitão has revised his number to 1.5 per cent, which is in line with projections by top economists.
The government maintains its debt reduction objectives, Leitão said, and will make a scheduled $1.5 billion deposit to the province’s Generations Fund which is destined to reduce Quebec’s massive long term debt.
The economic update, however, takes no steps toward the kinds of fiscal reforms proposed by the Godbout commission earlier this year.
That commission argued Quebec’s tax system is in desperate need of modernization. It proposed an increase in the province’s sales tax at the same time as the general income tax rate is reduced.
Leitão said the government decided the climate is not right for such a move. Quebec wants to see what tax measures the new Liberal federal government puts in place in the coming months before acting.
Prime Minister Justin Trudeau has promised a middle-class tax cut to be paid for by an increase in taxes for the very wealthy.
Unlike Quebec which is obsessed with slaying deficits, Trudeau proposes to let them run.
Leitão has a different philosophy. Thursday he even argued it would be “irresponsible,” for him to rule out a rumoured increase in the province’s gasoline tax.
The only tax relief Quebecers can count on for now has already been announced. The last budget pledged $2 billion in tax cuts over the next four years.
The first cuts kick in Jan. 1. That’s when Quebec introduces the notion of a “tax shield,” for certain categories of citizens and tax credits for older Quebecers who stay in the workforce.
Quebec has also pledged to gradually eliminate the unpopular health services tax starting Jan. 1, 2017.
But Quebec will hold off on more sweeping tax cut announcements until the province moves closer to the 2018 general election.
The opposition was not impressed.
Rattling off the long list of government cuts over the last two years including a rumoured new one in the childcare system, Parti Québécois finance critic, Nicolas Marceau, described Leitão’s move now as cynical.
“They are taking money from the little sister to give it to the big brother,” Marceau said.
“It’s a real joke,” said Coalition Avenir Québec finance critic François Bonnardel. “The education system will need a lot more investment for the next years.”
Thus, there was no demolition of the Quebec model. There has not been any toxic austerity or otherwise.