QUEBEC, March 13 /CNW Telbec/ - The 2008-2009 Budget, tabled today,
demonstrates prudence and discipline, allocating large amounts to the
goverment's main missions and carrying out carefully targeted investments to
stimulate productivity and innovation, and foster the well-being of families,
access to the labour market and skills development.
"Thanks to our rigorous management, the tax burden has been reduced.
Since 2003, the gap in the tax burden with the other provinces has been
reduced by almost 70%. We no longer pay the highest taxes in North America",
declared Minister of Finance, Minister of Government Services, Minister
responsible for Government Administration and Chair of the Conseil du trésor
Québec's economy is doing well despite the slowdown observed in the
United States. In January, the unemployment rate fell to its lowest level in
the past 33 years, that is, 6.8%. Private and public investment should rise
more than 10% this year. However, Québec is not insulated from the North
American economic context. No less than 75% of our international exports head
to the United States. Thus, the economic growth rate, which was 2.5% for the
current year, is revised today to 1.5%.
"However, the actions taken by our government should enable Québec to
avoid a recession. The one billion dollars in tax cuts that took effect on
January 1, combined with massive investments in infrastructure and energy
development, are sustaining our economic activity", affirmed the Minister.
"It is clear that our leeway is reduced. Fortunately, our government was
prudent. We have established a $1.8-billion budgetary reserve. The reserve was
generated from additional revenues freed up in recent fiscal years. We have
chosen to set them aside rather than spend them", indicated the Minister.
She added: "This reserve will be used to balance the budgets of the next
two fiscal years. We will therefore be able to absorb the shock of the
economic slowdown without raising taxes and without scaling back public
services. That is what I call responsible and prudent management. That is what
I call 'acting en bonne mère de famille'".
Reducing the debt burden
The public finance issue depends largely on sound management of the debt.
After creating the Generations Fund, which was was a major step in the
government's drive to reduce the debt burden, the government saw its efforts
rewarded when the rating agencies upgraded Québec's credit rating. The
government is taking today an important step that will have significant
Indeed, the 2008-2009 Budget provides for an increase from 50% to 75% in
the share of profits Hydro-Québec pays to the government in the form of
dividends. As a result of this measure, the addition of 11 billion dollars to
Québec's debt by 2025 will be avoided. Hydroelectricity is our "blue gold".
The soundness of Hydro-Québec's finances enables this revision of the dividend
payment policy without jeopardizing the corporation's development capacity. We
must make the most of this important asset, whose economic value largely
exceeds the book value in the public accounts", indicated Minister
New accounting rules
The government carried out a major accounting reform last fall in
collaboration with the Auditor General. This budget is the first to be
presented since the new accounting rules were adopted. The government thus
includes the health and education networks in its reporting entity. "This
major reform will be a milestone in the transition of government accounting
toward greater transparency and discipline in reporting on its financial
position", wrote the Auditor General when the accounting reform was unveiled.
"My objective in initiating this accounting reform was that no one be
able to question the quality of Québec government financial information. This
objective has been attained. For the sake of transparency, this budget has a
five-year financial framework. This framework demonstrates that our public
finances are balanced and on solid ground", concluded Minister Jérôme-Forget.
For further information:
For further information: Catherine Poulin, Press Officer, Office of the
Minister of Finance, Minister of Government Services, Minister responsible for
Government Administration and Chair of the Conseil du trésor, (418) 643-5270,
(514) 873-5363; www.finances.gouv.qc.ca