MONTREAL, March 9, 2020 /CNW Telbec/ - Quebec's robust economic growth in recent years has allowed the government to record a surplus each of the past five budgets. Between the 2014-2015 and 2018-2019 fiscal years, Quebec accumulated budget surpluses totalling $21.3 billion, a strong argument for a personal income tax cut, shows an MEI publication launched today.
Taxpayers have thus been overtaxed by significant amounts for the past five years. "This money belongs to Quebecers by right, not to the government. When you give a $20 bill to a cashier to buy a $15 product, you legitimately expect to receive your change," says Daniel Dufort, Senior Director of External Relations, Communications and Development at the MEI and author of the publication.
"Meanwhile, Quebec taxpayers are still the most heavily taxed in the country," notes Mr. Dufort. Indeed, the tax burden was 38.6% of GDP in Quebec in 2018, whereas the average for the rest of Canada was 32.2%. "Such a high tax burden considerably reduces individuals' purchasing power. Unsurprisingly, the disposable income of Quebecers was the lowest in the country in 2017," adds Mr. Dufort.
Last year, in 2018-2019, the budget surplus was $8.3 billion, or over one-quarter of the total tax collected on personal income ($31.8 billion). "This means, for instance, that the government could have reduced income taxes for each taxpayer by an average of 10% and still generated a surplus, even after the payment to the Generations Fund," says Mr. Dufort.
As there is talk these days of Quebec catching up economically, it is important to consider the role that taxation can play in this equation. Studies carried out by the OECD, among others, have shown that economies whose governments intervene and spend the most are generally the least dynamic, which is to say those that have the lowest growth rates.
"A simple and effective way to raise the living standards of Quebecers and the productivity of our economy is to implement a real income tax cut. The current context is an opportunity to be seized," concludes Daniel Dufort.
The Viewpoint entitled "Budget Surpluses: Quebec Must Give Taxpayers Back Their Money" was prepared by Daniel Dufort, Senior Director of External Relations, Communications and Development at the MEI. This publication is available on our website.
The MEI is an independent public policy think tank with offices in Montreal, Calgary, and Paris. Through its publications, media appearances, and advisory services to policy-makers, the MEI stimulates public policy debate and reforms based on sound economics and entrepreneurship.
SOURCE Montreal Economic Institute
For further information: Interview requests: Alexandre Bernier, Researcher, Current Affairs and Communications, MEI, Tel.: 514-273-0969 ext. 2226, Cell: 514-884-2947, Email: [email protected]