QUÉBEC, Nov. 20, 2012 /CNW Telbec/ - In tabling Budget 2013-2014, the
Minister of Finance and the Economy, Nicolas Marceau, announced
stricter management of infrastructure spending and new diversified
sources of revenues to reduce the debt load.
Improved management of infrastructure spending
"The Liberal government took decisions that caused spending to
skyrocket. In point of fact, it mortgaged the future away. This is the
case, for example, with infrastructure spending. These decisions add
undue pressure to current expenditures," the Minister pointed out.
He mentioned that many shortcomings had emerged regarding infrastructure
project management. Some investments were not entered in the Québec
Infrastructures Plan (QIP) and thus were not covered by the management
and monitoring framework. Moreover, project costs increased
significantly between the time they were announced and the time they
were incurred. In addition, the prioritization of certain investments
gave rise to legitimate questions. Furthermore, an examination, ordered
by Infrastructures Québec, of 18 recent priority projects showed that
the final costs were 78% higher than the costs initially forecast.
"Our fears concerning the management of infrastructure projects were
founded. Practices must be completely overhauled. We are therefore
tightening the rules governing project planning and management to get
better value from infrastructure spending. We will make sure that all
projects are included in the QIP. We will also evaluate the existing
asset stock to arrive at a comprehensive view that will enable us to
prioritize needs. In short, we will make sure that Quebecers get their
money's worth, both now and in the future," the Minister said.
He added that the pace at which infrastructure spending has risen in
recent years was not sustainable. "Our government is undertaking a
major shift in order to put us back on a trajectory that is compatible
with our ability to pay. The level of capital investments will be
capped at $9.5 billion a year, on average, for the next five years,
representing a reduction of $1.5 billion compared with what was planned
in Budget 2012-2013," he announced.
"We must make sure that infrastructure investment is in keeping with our
ability to pay and stop going further into debt. This annual amount of
$9.5 billion is considerable and will enable the quality of our public
infrastructure to be maintained," the Minister pointed out.
Debt reduction plan
"I have already stated that we intend to meet the objectives set in the
debt reduction statute. The previous government wanted to pay down the
debt by imposing on Quebecers a 20% increase in the price of
electricity. Instead, we will take a balanced approach," the Minister
Accordingly, he announced that the price of heritage electricity will be
indexed to the cost of living as of 2014. The resulting revenue will be
dedicated to the Generations Fund. Moreover, all mining royalties, an
estimated amount of $325 million annually, will be deposited in the
Generations Fund as of 2015-2016. The $100 million in revenue from the
increase in the tax on alcoholic beverages will also be deposited in
the Fund beginning in 2014-2015. This will also be the case for the
revenue arising from the increase in Hydro-Québec's profits further to
the abandonment of the project to refurbish the Gentilly-2 nuclear
power plant, which will represent $215 million per year as of
Lastly, he noted that the reduction in public infrastructure investment
will help reduce the growth in the debt.
"Moreover, we feel it is important to do something immediately to pay
down the debt. In 2013-2014, $1 billion will be drawn from the
Generations Fund for that purpose," the Minister said.
"Taken together, all of the actions I am announcing today will enable us
to meet the legislative targets for reducing the debt as a function of
GDP. That means that, as of next year, debt load as a percentage of GDP
will begin to decline," he concluded.
SOURCE: Cabinet du ministre des Finances et de l'Économie
For further information:
Assistant Chief of Staff and Press Relations Officer
Office of the Minister of Finance and the Economy