I wouldn't want to be in Girard's new shoes
Tuesday's budget may be his most challenging yet
Every year around this time, the National Assembly shifts its focus to a budget for the new fiscal year. On Tuesday, amid pomp and circumstance, Finance Minister Eric Girard is to rise at 4 p.m. to deliver the budget speech, symbolically wearing a pair of new shoes. Debate and detailed study will follow, with the opposition grilling the government on the proposed expenditures, leading up to the budget's adoption before the Easter break.
Budget preparation is an educated guessing game. Expenses for all government departments are established, as are anticipated revenues, mainly generated from taxes. These forecasts, though, may not survive future external influences like economic trends, interest rates and international events. In the absence of a crystal ball, the exercise is part economics, part political theatre.
In 2019, for the first Coalition Avenir Québec budget, Girard wore sneakers because “Quebec has to pick up the pace to close the gap with Ontario when it comes to productivity and wealth.”
In 2020, Girard tabled what was billed a “green budget,” investing more in measures aimed at reducing greenhouse gases. After years of economic growth and massive budgetary surpluses due to the austerity measures of previous Liberal governments, Girard also promised to spend on major infrastructure projects, health care and education. The next day however, the World Health Organization declared the COVID-19 pandemic, rendering Girard's best-laid plans almost useless.
Last year, the budget revealed that fighting COVID-19 was projected to cost the treasury a total of $30 billion over six years. Quebec had also completely consumed the $8-billion reserve fund it inherited from the Liberals. Girard's vision of balancing the books by 202526 was out the window.
Tuesday's budget may be Girard's most challenging. I wouldn't want to be in his new shoes. The war in Ukraine is greatly complicating what was already to be a difficult economic recovery period from the pandemic and Quebecers are feeling the impact.
Major investments are needed in health care and education, while the worrisome effect of soaring inflation on the cost of living requires a response.
Will the government simply hand out $200$275 cheques, as it did last fall? This would not be a viable solution. It's just redistributing the same tax dollars. Additional revenue is essential. But you can't draw money from a stone and just increase taxes. What we need is to increase the number of taxpayers. There is a dramatic labour shortage that is threatening the economy, and driving up costs for small businesses. The government has no reasonable choice but to make Quebec more open and attractive to immigration, not less.
Common sense must also prevail with health care and education expenditures. Quebec's bloated bureaucratic culture requires targeted surgery in both sectors. Fat must be cut intelligently so that relatively more money is spent on the parts of the system that directly deliver services — doctors, nurses, teachers, facilities, equipment — and less on civil servants at desks.
Another necessary measure being discussed is slashing the sales tax on gas. Some have pushed back, arguing that it would put more cars on the road. But the cost of fuel has a direct impact on the transport industry, and thus on the supply chain, which translates directly into additional costs for groceries and supplies. Until you have the energy infrastructure to replace the oil and gas industry, governments cannot abandon the sector without provoking the chain reaction of greater inflation.
Premier François Legault said he would respect Quebecers' intelligence and not offer a pre-electoral budget filled with goodies. Girard said the budget would be a responsible one. Their business and banking backgrounds respectively give reason to hope for real economic solutions based on common sense, not political theatre.
Robert Libman is an architect and building planning consultant who has served as Equality Party leader and MNA, as mayor of Côte-st-luc and as a member of the Montreal executive committee. He was a Conservative candidate in the 2015 federal election. twitter.com/robertlibman