$11 billion deficit is 'reasonable,' Legault says
(Quebec) Accused of being the "King of deficits," Premier François Legault counters that the $11 billion hole for 2024-2025 is "reasonable" compared to the size of Quebec's economy. Among other things, he pledged to clean up the "bureaucracy" in order to reduce it, in particular by reducing the number of civil servants that had surged under his leadership.
When he tabled his sixth budget on Tuesday, Finance Minister Eric Girard acknowledged that the $11-billion deficit – four times larger than expected – is the highest in history in absolute terms.
What you need to know about the 2024 Quebec budgetDuring a press conference on Wednesday, François Legault tried to put the weight of this burden into perspective as the Liberal Party accused him of having lost control of spending and of being the "King of deficits".
If we do not take into account the payments to the Generations Fund, which is used to reduce the debt, the accounting deficit – i.e. revenues minus expenses – amounts to $8.8 billion, Mr. Legault said.
It's 1.5% of GDP, I think that's a reasonable thing. You can't look at it in absolute terms, you have to take inflation or GDP into account.
François Legault, Premier of Quebec
"I've seen a lot of people say, 'Record deficit. In the history of Quebec, there have been five times governments that have had a bigger deficit than the rest of us," he added. "We've had two QLP governments that had deficits of 3.1% and 3.3% of GDP," he said. That was in the 1990s. "And three PQ governments have had deficits of 1.7 per cent, 3.8 per cent and 4.7 per cent ofGDP." It was in 1980-1981 in the last case, during the oil shock and recession.
As for his own government's deficit, "we have to take into account that there is an economic slowdown, that there is a special situation at Hydro-Québec because of the water levels that are causing us to lose a billion," he said. "And we're in the process of straightening out the two important networks [of health and education] and, for that, we also need to invest. And it was time to put money back" to taxpayers with last year's tax cut.
"With these two choices we made last year and this year, we accept a deficit, but we will gradually return to a balanced budget over five years. I'm very confident that we're going to get there," said the Prime Minister.
It has already begun to sweep corporate tax credits. And that's not all. "Given that we are now at full employment, there are a lot of tax credits that are given on the basis of wages, on the basis of job creation, whereas today, what we lack is not jobs, we lack well-paying jobs." He also intends to "accelerate economic growth", which has stalled for the time being.
"The other thing we're going to do is we're going to review spending to reduce bureaucracy, to be able to remove spending that isn't efficient."
In two years, the number of public servants in departments and agencies jumped 7.6% to 78,456 "full-time equivalents" (FTEs). François Legault now plans to cut jobs through attrition, thanks to retirements. "In the administrative part, there are places where you can make gains," he said.
The Prime Minister's intention is "absurd," according to the Syndicat de la fonction publique du Québec (SFPQ), which represents 30,000 public servants. There will be a "cut in services," contrary to what Mr. Legault suggests.
"We're on the fence right now and we have no possibility of cutting public servants without cutting services," said SFPQ president Christian Daigle. Where does he want to cut? At the SAAQ? At the Ministry of Justice? On welfare? In occupational health and safety? To the Ministry of Transport? What mission of the state is not important to him? »
Expenditure ReviewThe government is launching a review of all its spending, the results of which will be known in a year's time. The Ministry of Health will have to do its part like the others, said Minister Christian Dubé. "With the arrival of Santé Québec, where we will be separating orientations and operations, this is the ideal year to do this type of exercise. [...] We are going to do a major review of our programs. Asked if a co-payment or a health tax could be introduced, he replied that "we are not there yet".
Education Minister Bernard Drainville said "it's not in the cards" to cut subsidies to private schools.
Eric Girard is not worried about a downgrade of Quebec's credit rating by the rating agencies. He met with them prior to the budget and will meet with them in May. "I expect them to recognize that the current situation is difficult and that we take action immediately, responsibly, and that we are committed to returning to a balanced budget [...]. Before you have a haircut, there would be a negative outlook. Currently, our outlook is stable for all agencies," he said.
When he tabled his sixth budget on Tuesday, Finance Minister Eric Girard acknowledged that the $11-billion deficit – four times larger than expected – is the highest in history in absolute terms.
What you need to know about the 2024 Quebec budgetDuring a press conference on Wednesday, François Legault tried to put the weight of this burden into perspective as the Liberal Party accused him of having lost control of spending and of being the "King of deficits".
If we do not take into account the payments to the Generations Fund, which is used to reduce the debt, the accounting deficit – i.e. revenues minus expenses – amounts to $8.8 billion, Mr. Legault said.
It's 1.5% of GDP, I think that's a reasonable thing. You can't look at it in absolute terms, you have to take inflation or GDP into account.
François Legault, Premier of Quebec
"I've seen a lot of people say, 'Record deficit. In the history of Quebec, there have been five times governments that have had a bigger deficit than the rest of us," he added. "We've had two QLP governments that had deficits of 3.1% and 3.3% of GDP," he said. That was in the 1990s. "And three PQ governments have had deficits of 1.7 per cent, 3.8 per cent and 4.7 per cent ofGDP." It was in 1980-1981 in the last case, during the oil shock and recession.
As for his own government's deficit, "we have to take into account that there is an economic slowdown, that there is a special situation at Hydro-Québec because of the water levels that are causing us to lose a billion," he said. "And we're in the process of straightening out the two important networks [of health and education] and, for that, we also need to invest. And it was time to put money back" to taxpayers with last year's tax cut.
"With these two choices we made last year and this year, we accept a deficit, but we will gradually return to a balanced budget over five years. I'm very confident that we're going to get there," said the Prime Minister.
It has already begun to sweep corporate tax credits. And that's not all. "Given that we are now at full employment, there are a lot of tax credits that are given on the basis of wages, on the basis of job creation, whereas today, what we lack is not jobs, we lack well-paying jobs." He also intends to "accelerate economic growth", which has stalled for the time being.
"The other thing we're going to do is we're going to review spending to reduce bureaucracy, to be able to remove spending that isn't efficient."
In two years, the number of public servants in departments and agencies jumped 7.6% to 78,456 "full-time equivalents" (FTEs). François Legault now plans to cut jobs through attrition, thanks to retirements. "In the administrative part, there are places where you can make gains," he said.
The Prime Minister's intention is "absurd," according to the Syndicat de la fonction publique du Québec (SFPQ), which represents 30,000 public servants. There will be a "cut in services," contrary to what Mr. Legault suggests.
"We're on the fence right now and we have no possibility of cutting public servants without cutting services," said SFPQ president Christian Daigle. Where does he want to cut? At the SAAQ? At the Ministry of Justice? On welfare? In occupational health and safety? To the Ministry of Transport? What mission of the state is not important to him? »
Expenditure ReviewThe government is launching a review of all its spending, the results of which will be known in a year's time. The Ministry of Health will have to do its part like the others, said Minister Christian Dubé. "With the arrival of Santé Québec, where we will be separating orientations and operations, this is the ideal year to do this type of exercise. [...] We are going to do a major review of our programs. Asked if a co-payment or a health tax could be introduced, he replied that "we are not there yet".
Education Minister Bernard Drainville said "it's not in the cards" to cut subsidies to private schools.
Eric Girard is not worried about a downgrade of Quebec's credit rating by the rating agencies. He met with them prior to the budget and will meet with them in May. "I expect them to recognize that the current situation is difficult and that we take action immediately, responsibly, and that we are committed to returning to a balanced budget [...]. Before you have a haircut, there would be a negative outlook. Currently, our outlook is stable for all agencies," he said.
