QUÉBEC, June 4, 2014 /CNW Telbec/ - Minister of Finance Carlos Leitão,
tabled Québec's budget for 2014-2015 today, a budget for economic
recovery and to restore sound public finances.
"We want Québec to create more wealth and our economy to support more
jobs. At the same time, we want to end the structural imbalance in
public finances that puts us deeper into debt each year and
increasingly limits our freedom of action. With Budget 2014-2015, the
government is taking the first step on the critical path we must travel
to finally restore fiscal balance. It defines the objective set and
puts in place the means to achieve it. The edifice we want to build
will be supported by two strong pillars―a prosperous economy and public
finances that will finally be sound," the Minister said.
Action according to five thrusts to boost economic recovery
The Minister explained that, to boost economic recovery, the government
will act according to five thrusts. The first will be in the form of
new support for private investment, with a focus on SMEs, particularly
manufacturing SMEs. The second will be the implementation of the
maritime strategy, a plan to responsibly develop Québec's maritime
potential while acquiring a unique environmental expertise. The third
will be recognition of the economic, social and environmental
components of the Plan Nord. The fourth will be development of the
natural resources present throughout Québec. And finally, the fifth
will be continued investment in infrastructure, while controlling the
debt and staying within Quebecers' ability to pay.
A return to a balanced budget for 2015-2016
Minister Leitão confirmed that the government will adhere to the planned
timeline for balancing the budget. However, the deficit targets will be
reviewed to take into account downward revenue adjustments and
anticipated program spending overruns. In that regard, the Minister
noted that the situational factors having contributed to the weak
economic performance of 2013 should gradually disappear. Québec's
economic growth will pick up, posting a rate of 1.8% in 2014 and 2.0%
The Minister announced that the deficit will be $3.1 billion in
2013-2014 and $2.35 billion in 2014-2015. The return to a balanced
budget is planned for 2015-2016.
"The budget deficit for 2013-2014 is $600 million more than the figure
forecast by the previous government barely three months ago. For
2014-2015 and 2015-2016, if nothing were done, Québec would be faced
with deficits of $5.9 billion and $7.6 billion respectively. This
situation, confirmed by the Auditor General, is unacceptable. Spending
continues to grow faster than revenue, which is the very definition of
a structural deficit. The time has come to finally tackle this problem,
before others force us to do so," he said.
The Minister explained that the government is committing itself to
managing spending responsibly and optimizing government reporting at
large. All departments and public bodies, as well as government
enterprises, will contribute. The return to a balanced budget will be
achieved without increasing taxes, apart from measures with which a
large majority of Quebecers should agree, and by complying with the
collective agreements of public and parapublic sector employees and
protecting essential services, that is, primarily health services,
education services and services to vulnerable individuals.
Actions to be taken to balance the budget
The Minister stated that, given the adjustments to the financial
framework, substantial effort will be required to return to a balanced
"Until the budget has been balanced, consolidated expenditure growth
will be set below the revenue growth rate. Accordingly, for 2014-2015,
it will be 1.9%, whereas the rate for revenue will be 2.9%," the
Moreover, he reiterated that, to balance public finances for the long
term, a review of existing programs and taxation is necessary. To that
end, two committees will be created:
the Ongoing Program Review Committee, which will enable a repositioning
and implementation of an ongoing review process aimed at redirecting
government action to priority programs, where the needs are greatest;
the Québec Taxation Review Committee, chaired by Luc Godbout, which will
be mandated to prepare a report on the tax situation in Québec and
propose the answers necessary so that the tax system adequately funds
public services while fostering economic growth.
"Budget 2015-2016 will set forth additional measures for restoring
fiscal balance, in particular by acting on the work of the two
committees," the Minister indicated.
Maintaining debt reduction objectives
The Minister emphasized that reducing the debt load is a priority for
the government. In that regard, Budget 2014-2015 confirms the
maintenance of the objectives for 2025-2026 at 45% of GDP for the gross
debt and at 17% of GDP for the debt representing accumulated deficits.
"Once the budget has been balanced, half the government's budget
surpluses will be allocated to debt reduction through additional
deposits in the Generations Fund. The other half will be allocated to
tax cuts, giving preference to gradual elimination of the health
contribution," announced the Minister.
A transparent government
The Minister concluded by saying that the tabling of the budget and the
discussion of the measures to be implemented will be marked by respect
and a willingness to listen. "Dialogue will give all citizens and all
groups an opportunity to learn about the measures and react to the
initiatives announced. We will be transparent in our actions and in the
use of public funds," he said.
"In the country where I was born, we say a esperança sempre entra quando deixamos a porta aberta, which means 'hope always comes through an open door.' This budget
opens doors to a better future for Québec," the Minister concluded.
The public can find out about Québec's budget for 2014-2015 right away
by visiting www.budget.finances.gouv.qc.ca/2014-2015.
To react to the budget, Quebecers can go to decouvrezlebudget.gouv.qc.ca.
SOURCE: Cabinet du ministre des Finances
For further information:
Press Relations Officer
Office of the Minister of Finance