The provincial Minister of Finance presented her second budget last Thursday, amid concerns of a global economic slow-down. The lacklustre event failed to attract much attention despite the media’s usual frenzy over such documents, which display a government’s intentions and their priorities for the coming year.
The Liberals have held on to a minority in the National Assembly for two years now, but times will change drastically in the coming months. Confidence in the province’s economy – although a defective determinant of growth – is at its lowest point in a decade, and the recession looming in the neighbouring United States does not bode well for the sustenance of Quebec’s manufacturing sector.
In this 2008-2009 exercise, Monique Jérôme-Forget’s room for manoeuvre was drastically reduced by these doomsday predictions. In fact, government revenues are stagnant at $62.96-billion, a mere $60-million increase from the last budget. Although the minister is required by law to present a balanced budget, spending will actually surpass revenues this year. The minister is banking on a $1.3-billion reserve fund to wipe out the deficit, even though no one in the Liberal Party dares call it that.
This time around, the Minister relied heavily on state-owned Hydro-Québec, which has increased its electricity rates six times since January 2004. In fact, the power company is now forced to shell out 75 per cent of its profits to the government. Hydro-Québec has become the government’s cash cow; the higher bills we pay every month provide for a lot more than the juice in our appliances.
While environmental concerns over our wasteful use of electricity are valid and should be addressed, it is now clear that the government is not pushing these increases to promote consumption efficiency. The Liberals, who have always argued for lower income taxes, have instead created a new levy indiscriminate of one’s income or ability to pay. Jérôme-Forget nonetheless promised the government’s greed would not translate in yet-higher Hydro bills, although this remains to be seen.
This being said, the budget did contain a number of piecemeal measures designed to legitimately improve the province’s environmental record. The government will finance the development of clean technologies, and promises a tax break for private investments in geothermal energy. It also plans to put money into national parks, and the protection of fresh water basins.
Cheers ends here though. The government steered clear of imposing new environmental regulations on the manufacturing sector, and even chose to finance the already-booming mining industry in Northern Quebec. Also, its schizophrenic investments in both the road network and public transportation fail to demonstrate a clear engagement in favour of greener lifestyle choices.
In education, the Minister announced a $40-million investment toward the province’s universities and CEGEPs. This comes in addition to a new $187-million transfer from the federal government, also earmarked for education. In total, universities alone are promised $152-million in new money for 2008-2009, which is still shy of the $400-million reinvestment demanded by students the province over. Likewise, the tuition defreeze will only bring in $75-million, and cannot address the system’s chronic underfunding, not to mention the increased pressure it places on already indebted students.
The political repercussions of this budget have already been felt. The official opposition ADQ, lured by additional incentives for suburban families, has chosen not to oppose the budget. ADQ leader Mario Dumont once again demonstrated his pushover nature, not unlike a certain Liberal opposition leader in Ottawa.
Nonetheless, the real test will come during the next 12 months of this minority government. With the economy showing signs of weakness for the first time in a long while, the government will need to steer carefully and may not remain at the helm very long. Lethargic revenues and a dissatisfied citizenry may push the Liberals overboard, potentially propelling the Parti Québécois into power.
Alexandre de Lorimier may be reached at email@example.com.