Quebec Finance Minister Raymond Bachand responds to Opposition questions Thursday, March 1, 2012 at the legislature in Quebec City.Jacques Boissinot/THE CANADIAN PRESS
Finance Minister Raymond Bachand is urging Ottawa to steer clear of harsh cutbacks to the provinces that he says could stunt economic growth and jeopardize Quebec's ability to generate wealth and maintain social services.
"I hope that despite the economic uncertainties, [federal Finance Minister]Jim Flaherty tables a budget [March 29]that sustains economic growth and maintains federal transfers. He can do it," Mr. Bachand said.
Quebec has the highest debt level in the country with several generous social programs that the governing Liberals feel they can't afford to slash as they head into an election year.
Mr. Bachand, who said Tuesday he will table a provincial budget on March 20, reassured taxpayers that Quebec is on target to eliminate its deficit by the 2013-2014 fiscal year. In fact, the province expects to generate a $2-billion surplus in 2015, he said.
Quebec may be ahead of Ontario in eliminating its deficit largely because it is in the third year of a five-year plan to reach a balanced budget. But it faces much greater challenges to reduce its $184-billion debt.
The government must tackle the debt while at the same time dealing with changing demographics. The elderly population in Quebec is increasing faster than elsewhere in the country and demands for more services are placing an additional burden on the public purse. Older voters are being targeted by the Liberals since they are considered a traditional base of support for the party.
Recent reports of abuse, negligence, poor services and inadequate supervision in the province's 468 publicly run nursing homes has forced the government to review programs for the elderly. Mr. Bachand said that while new measures for the elderly will be introduced in the budget, the cost will be manageable.
"It's not going to jeopardize the balanced budget,' he said. "The cost of health services is increasing every year because of the aging population. But we have to change the way we serve the elderly."
That will mean more homecare services rather than the more costly long-term care facilities, Mr. Bachand said.
The minister insisted that spending is under control, including in the costly ministries of health care and education, and said there will be no tax increases.
The government plans to reduce the deficit without raising taxes in large part because of the compensation it will receive from Ottawa for the harmonization of the provincial sales tax with the federal GST. That compensation will total $733-million this year, with an additional $1.46-billion in 2013. Because of lower than anticipated economic growth and a corresponding shortfall in revenue, the cash infusion of more than $2.2-billion will be needed to help balance the budget.
The government is also counting on revenue from the surge of investments in the mining sector. According to Statistics Canada, mining companies are expected to invest $4.4-billion in Quebec in 2012, a 62-per-cent increase over last year.
"Keep in mind that this represents not only $1.8-billion over five years in mining duties but another $5-billion fiscal fallout just because of the mining companies," Mr. Bachand said.
Rhéal Séguin