During his first day on the job, Premier Philippe Couillard announced austerity measures he said are urgently needed to wrestle down a higher-than-expected deficit and reassure credit rating agencies his government will balance the budget by the end of the next fiscal year.
Then he turned his attention to the federal government in a brief informal meeting with Prime Minister Stephen Harper. Mr. Couillard said the two governments need to improve co-operation rather than fight over their differences in court.
“That’s the message we want to carry right across Canada. On the economy, there are things we can do better together. And on other subjects, why don’t we resolve matters rather than always go to court? It seems natural. Tomorrow [Friday] we will have a court decision. It may have an impact on the conversations that will follow,” Mr. Couillard said before meeting Mr. Harper.
On Friday, the Supreme Court of Canada will rule on whether the Harper government can make major changes to the Senate. Quebec has argued that changes cannot happen without its consent. The province is also concerned about Ottawa’s intention to sidestep a Supreme Court decision that creating a national securities commission would be unconstitutional.
“Any changes in the federation need to reflect the specific needs of Quebec,” Mr. Couillard said.
After the 50-minute meeting, Mr. Harper indicated his government will work with the newly elected Liberals on their economic and job-creation agenda, stressing Quebec’s “leadership role within the federation.” Mr. Harper’s press attaché Carl Vallée said infrastructure, energy development and Mr. Couillard’s strategy to increase exports were also discussed. He did not say whether Mr. Harper responded to Quebec’s position on Senate reform or a national securities regulator.
The state of Quebec’s public finances is still the government’s priority. Mr. Couillard said the deficit for the current fiscal year is now projected to be $3.1-billion. The Parti Québécois had forecast it at $2.5-billion in last February’s budget. The higher deficit, the Premier said, was partly due to slower economic growth, which reduced corporate taxes paid to the government.
To hit the deficit target, Mr. Couillard said $3.7-billion must be cut from spending programs during the current fiscal year. He suspended all new programs, announced a hiring freeze in the civil service and slashed overtime, travel costs and publicity budgets for a saving of $480-million this year. Another $1.8-billion will be saved by reducing current government spending programs. The remaining $1.4-billion in cuts will be announced in the Liberal budget to be tabled in June.
A study by a group of experts which examined the state of Quebec’s public finances will be tabled on Friday. The provincial Auditor-General is also reviewing of the province’s finances, and is expected to report before the budget.
Mr. Couillard said the cuts are just the beginning. A complete review of all government programs will begin soon, he said.
“A permanent commission will be set up to review the programs. … We don’t need to have in Quebec the most luxurious programs in Canada,” he said without giving details.
No provinces match Quebec’s generous parental leave program or its $7-a-day childcare.
Newly appointed Finance Minister Carlos Leitao said the province spends more on programs than it has received in revenues.
“We need to question the relevance of all our social programs,” Mr. Leitao said going into his first cabinet meeting. “Decisions will be difficult in the sense that some programs will be abolished, will have to be changed, will have to be reduced and others might have to be increased. … We won’t be able to change everything in six weeks [before the budget], but at least the direction in which we want to go in the next four years will be clearly established.”
In a bid to stimulate the economy, the Premier announced a tax credit for home renovations that will take effect immediately and be outlined in the budget. Mr. Couillard will deliver his government’s inaugural speech when the National Assembly returns on May 20.