Quebeckers are bracing themselves for sweeping increases in taxes, rates and fees after a provincial budget that also proposes a controversial user fee for health-care services.
By proposing a fee for medical appointments, the 2010-11 budget tabled Tuesday represents a shift in how the province addresses spiralling health-care costs, and could trigger a national debate over conflicts with the Canada Health Act.
"Maybe it's time Canadians sit down and examine that legislation," said Finance Minister Raymond Bachand. "The goal here is to serve our citizens and to have health services for all our citizens."
The user fee would take the form of a deductible that, according to one proposal, would be capped so that total charges do not exceed 1 per cent of a family's annual income. It would involve charging $25 per medical visit and be paid on a fee-for-service basis. It was estimated under one proposal that a couple with two children making 10 medical visits a year would pay a maximum of $250 annually.
The government of Premier Jean Charest also announced a new health tax to commence in June, 2010, that will be levied on individuals when they file their income taxes. The "health contribution" will cost adults $25 this year and eventually climb to $200 in 2012. Lower-income families will be exempt. When fully implemented, the new tax will generate $945-million a year.
"Everybody benefits from health care; everybody should pay," Mr. Bachand said.
The budget addresses the fiscal straits facing Canada's most debt-burdened province, where the gross debt totals $151-billion, or 50.1 per cent of GDP, the highest ratio in Canada.
Projecting a $4.5-billion deficit for 2010-11 on revenues of $64.5-billion, the government repeated its goal of balancing the budget by 2013-14, partly through tax and fee increases to be spread over a number of years.
For instance, the fuel tax is to rise by one cent a litre on Thursday and again every year for the next three years. The four-cent increase in the fuel tax will be used to improve roads and public transit.
The one-percentage-point provincial sales tax increase planned for Jan. 1, 2011 will be followed by another one-percentage-point increase the following year, bringing the total provincial sales tax to 9.5 per cent on Jan. 1, 2012. This measure is expected to bring in $2-billion a year in additional revenues.
University tuition fees, among the lowest on the continent, will also be increased in 2012, but the government has yet to decide by how much. In 2014, electricity rates for domestic customers are to rise gradually by a total of 1 cent per kilowatt hour by 2018.
Once all increases in new taxes and levies take effect - including future increases to home electricity rates - a couple with two children earning a combined annual income of $70,000 will pay $1,104 more a year to the government, according to figures in the budget.
Opposition critics contend that even with all the tax and rate increases there are no guarantees the government can restore Quebec's finances.
"Since taking power in 2003, Premier Jean Charest will have indebted Quebeckers by more than $42-billion, which is an historic record," said Parti Québécois Leader Pauline Marois.
While telling Quebeckers they must pay more for services, the Charest government wanted to show that it was doing its share of belt-tightening. A symbolic measure was to freeze the salaries of all elected members of the National Assembly, including the Premier and his ministers. More significantly, a freeze was imposed on the government payroll, bonuses were suspended for management in government-owned companies and the government plans to amalgamate or abolish 30 organizations.
Other efforts include tackling costly illegal practices such as false invoices, embezzlement and unreported work in the construction industry, which are estimated to have cost the government $1.46-billion in tax losses in 2008.
The government projects it can reduce spending growth to 3.2 per cent this year and 2.8 per cent in 2011-12.
Collective agreements with the province's 450,000 public-sector workers expire on Wednesday, and talks have ground to a standstill in recent days. But the government remained adamant in maintaining its proposal of increasing overall salaries and pay equity to 7 per cent over five years, far below union demands.