QUÉBEC, June 4, 2014 /CNW Telbec/ - In tabling Québec's Budget
2014-2015, the Minister of Finance, Carlos Leitão, announced a series
of measures to restore sound public finances.
"The effort required to return to a balanced budget will be focused
essentially on public spending, with more than 90% being made in
2014-2015. In 2015-2016, once the systematic program analysis is under
way, the share will be raised to 95%.
The Minister announced measures to reduce program spending growth, cut
tax expenditures and control the spending of government bodies and
enterprises. He also announced a general freeze on staffing in the
public and parapublic sectors until 2015-2016.
He noted that in April, the government announced spending control
measures for all departments as of 2014-2015, in the form of
productivity gains representing 2% of the payroll, a 3% reduction in
operating expenditures and tightening of subsidy grants and promises.
With Budget 2014-2015, new spending control measures grouped into four
categories will be introduced:
administrative spending cuts;
reviews of certain program costs or the schedule for certain projects;
reconsideration of certain development measures;
other measures, such as reducing the amounts paid to bodies.
"These measures will represent savings totalling $2.7 billion in
2014-2015 and $2.4 billion in 2015-2016," the Minister declared.
In addition, the government will ask government enterprises, bodies and
special funds to make an effort comparable to that requested of
government departments, so as to reduce government public spending by
$438 million in 2014-2015 and $172 million in 2015-2016.
Lastly, the Minister announced that the government will proceed with a
general freeze on staffing in the public and parapublic sectors, to be
carried out until the end of fiscal 2015-2016, it being understood that
any positions that become available during that period will be
allocated on a priority basis to services to the public. This general
freeze will achieve savings of $100 million in 2014-2015 and
$500 million in 2015-2016.
"I would like to stress that any new budgetary program or government
service not provided for in the financial framework must necessarily be
financed through equivalent program savings. This is known as
offsetting public spending," the Minister declared
Tax expenditure measures
The Minister also announced a series of measures concerning the
government's tax expenditures. "Québec has many targeted tax assistance
measures for businesses, particularly large corporations. These
measures are costly and can create unfairness. The government wants to
gradually change these incentives so that they are general rather than
specific in scope. These measures of general scope will be simpler to
apply, thus maximizing their benefits and limiting the administrative
burden on businesses," the Minister explained.
He announced a 20% reduction in the rates of several tax credits, the
elimination or suspension of certain tax measures announced since
September 2012, as well as caps on certain fiscal measures for business
capitalization. The reduction of tax expenditures will cut spending by
$348 million by 2015-2016.
"The government's aim is for Québec's corporate tax system to compare
favourably with those of its main trading partners. Québec must offer
businesses conditions fostering investment and innovation to increase
wealth creation and thus secure the prosperity of Quebecers. The
recommendations of the Québec Taxation Review Committee, which will be
tabled before the next budget, will contribute to the reflection
process surrounding the review of Québec's tax system," the Minister
The Minister also announced measures that will increase government
revenues. The first aims to introduce new measures in the fight against
tax evasion. These efforts should bring in additional revenues of
$111 million in 2014-2015 and $133 million in 2015-2016.
In addition, the tobacco tax will increase by $4 per carton of 200
cigarettes as of June 5, 2014. In addition, the rates of the specific
tax on alcoholic beverages, which vary according to the type of product
and the place where they are consumed, will be standardized. The tax
rates respecting products sold for consumption in bars and restaurants
will be reduced and those applicable to products sold for consumption
at home will be raised.
"Restoring fiscal balance and closing the gap between spending growth
and revenue growth will enable us to preserve our freedom of choice,
which we could lose if nothing is done," the Minister concluded.
SOURCE: Cabinet du ministre des Finances
For further information:
Press Relations Officer
Office of the Minister of Finance