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Quebec Finance Minister Carlos Leitao displays his budget speech, on the eve of a provincial budget speech on Monday in Quebec City. (Jacques Boissinot/The Canadian Press)
Quebec Finance Minister Carlos Leitao displays his budget speech, on the eve of a provincial budget speech on Monday in Quebec City. (Jacques Boissinot/The Canadian Press)

Globe editorial

Globe editorial: Quebec’s surplus budget offers hope, but trouble lurks around the corner Add to ...

Budget season is at its height in Canada’s legislatures. Of the seven tabled so far, look who just posted the only surplus bigger than a rounding error: that alleged fiscal basket case, Quebec.

The province’s coffers are overflowing. Quebec is now doing things like retroactively eliminating health-care premiums for 2016 and funding future investments – for example, in artificial intelligence research – out of last year’s $2.3-billion surplus.

The government has so much to spare that it has even put hundreds of millions into a rainy-day fund.

Most of the influx is due to unanticipated tax revenue growth from an economy that is outpacing projections and expanding faster than the national average.

The province has also been more committed than most in recent years to slowing the rate at which big-ticket expenditures, such as health care, are increasing. It is pledging to do more of the same in 2017-18, including revisiting doctors’ income.

Quebec Finance Minister Carlos Leitao says his fourth budget represents “hope rediscovered.”

It’s an understandable boast – and also one to be expected. With Philippe Couillard’s Liberals seeking re-election next year, a good-news budget of modest tax cuts and increased investments in social programs is no huge surprise.

But the good news should not draw attention away from the warts. For example, Quebec still hasn’t mitigated the severe cuts to education made early in Mr. Couillard’s mandate. Reinvestments in early-childhood education this year seem disproportionally low.

Then there is Quebec’s $207-billion debt. Lower-than-expected servicing costs can’t obscure Quebec’s debt-to-GDP ratio, still the country’s highest, at 52.7 per cent.

In a province that is aging rapidly – its historically low unemployment rates are partly driven by declining labour supply – and experiencing annual net outmigration, the challenges are manifold.

Economists warn that the aging population will lead to an explosion in Quebec’s health-care costs beginning around 2020.

And overall, Quebec remains, according to many measures, a relatively poor province that spends more per capita on social programs than its peers.

So yes, hope. The question is, how long it can last?

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